Wills, Trusts & Estates Prof Blog

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

Tuesday, June 25, 2019

The Future Looks Terrible for U.S. Nursing Home Costs

Nursinghome2Georgetown University Medical Center conducted a six year survey that revealed that the prices of nursing homes have been increasing quickly allover the country. The trend shows no signs of slowing down.

From 2005 to 2011, the period of time reviewed by the survey, California, Florida, New York and Texas all saw increases that surpassed the inflation rate. The study found nursing home price rises over the period measured generally outpaced increases in overall medical care (20.2%) and general consumer prices (11.7%). Because of the costs of long-term care and the laws governing it, many nursing home residents must spend down the bulk of their life savings before qualifying for federal assistance.

It could be an issue of supply and demand, with more people needing long-term care than facilities that provide those services. More elderly Americans mean more demand for nursing home care, and more demand for nursing home employees. Wages go up, and the cost is passed along to consumers who, under the current system by which America looks after its elderly, coverage is limited. Dr. Sean Huang, the study’s lead author, explained that the growing population of those in nursing homes are those that are they for long stays, including those with Parkinson's and dementia. “Medicare does not cover that. They will pay out-of-pocket until they use all of their wealth.” 

And it does not look like the trend will be changing any time soon, especially with Wall Street seeing money signs. Four out of the 10 largest for-profit nursing home chains were purchased by private equity firms from 2003-2008, and studies on the effect of these purchases show mixed results for consumer effects.

See Luke McGrath, The Future Looks Terrible for U.S. Nursing Home Costs, Financial Advisor, June 25, 2019.

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

June 25, 2019 in Current Affairs, Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Article on More Losses, More Problems: Excess Business Loss Rules

BusinesslossLibin Zhang recently published an Article entitled, More Losses, More Problems: Excess Business Loss Rules, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

The Tax Cuts and Jobs Act enacted new section 461(l), which generally limits an individual’s deductions for some business losses. For a tax provision that is expected to raise $150 billion of federal revenue over 10 years (more than global intangible low-taxed income (GILTI) or the base erosion and antiabuse tax (BEAT)), the loss limitation has not received much attention from commentators or Treasury.

This article discusses some issues with the limitation, including whether it applies to wages and (ironically) losses on the disposition of business property, its interaction with the section 199A passthrough business income deduction, and special considerations for trusts and estates.

June 25, 2019 in Articles, Current Affairs, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Was the unanimous SCOTUS wrong in deciding North Carolina Department of Revenue v. Kaestner Family Trust?

On June 21, 2019, the Supreme Court of the United States decided North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust. By a 9-0 margin (7 joining the majority and 2 strong concurring opinions), the court decided that North Carolina cannot tax nonresident trust payments.

In Due Process, State Taxation of Trusts and the Myth of the Powerless Beneficiary: A Response to Bridget Crawford and Michelle Simon, 67 UCLA L. Rev. Disc. (2019), Prof. Carla Spivack (Oxford Research Professor of Law and Director, Certificate in Estate Planning, Oklahoma City University School of Law), takes issue with Bridget Crawford and Michelle Simon’s arguments (the ones that prevailed in the case) in their article The Supreme Court, Due Process and State Income Taxation of Trusts, 67 UCLA L. Rev. Disc. 2 (2019).

Here is a brief excerpt from Prof. Spivack's article:

Taxing the beneficiary in this case is entirely consistent with the basic principle of tax law that a person who controls and receives benefit from income should pay taxes on it. The real question here is whether the beneficiary controlled, and received enough benefits from, her trust income while she lived in North Carolina to pay state income taxes on it. The trustee by definition is barred from enjoying any beneficial interest in the trust property—the only person who may receive beneficial interest is the beneficiary. If and when the beneficiary receives the benefits of trust income, she should pay the corresponding tax in her state of domicile. This is uncontroversially consistent with due process. The trustee here makes ample use of the myth of the powerless beneficiary by trying to direct all eyes to the trust in the question of tax jurisdiction. But the Court need not fall for this sleight of hand.

This brings me to Crawford and Simon’s second major point. They assert that the fact that the beneficiary did not receive distributions from the trust while in North Carolina means the state cannot tax her proportionate share of trust income. I argue that the mere fact that the trustee did not literally write checks to the beneficiary does not mean she failed to benefit from her share of trust income or control it for tax purposes. First, as discussed below, the record shows that her interest in the trust alone, even without distributions, allowed her to benefit from her share of trust income, in ways that should subject her to taxation in the state. Second, the beneficiary requested that the trustee not make distributions to her during the relevant period. Under tax law, her power to decline distributions showed she had control over them, and thus was required to pay income taxes.

June 25, 2019 in Articles, Income Tax, New Cases, Trusts | Permalink | Comments (1)

Monday, June 24, 2019

Property Law Professor Opening at University of Detroit Mercy School of Law

Detroit MercyUniversity of Detroit Mercy School of Law seeks a proven or aspiring scholar and teacher with an interest in teaching first-year Property Law for a tenured or tenure-track position beginning 2020-2021.  Applicants must have a law degree and strong academic background and must demonstrate either a record of or potential for both teaching excellence and high scholarly achievement in any area of law.  The balance of the teaching package will be determined in conversation with the successful candidate.

To Apply: Applicants should send a cover letter, which should include a brief description of their ideal teaching package and a general indication of their areas of scholarly interest.  Please direct the cover letter, a current CV, additional supporting materials (if any), and any questions you may have to:

Professor Julia Belian, Chair of Faculty Recruitment
University of Detroit Mercy School of Law
651 East Jefferson
Detroit, Michigan 48226

(belianju@udmercy.edu, 313-596-0225)

Materials will be accepted via email or regular mail.  Review of applicants will begin in July 2019 and will continue until the position is filled.

About Our Program of Legal Education: Detroit Mercy Law offers a unique curriculum that complements traditional theory- and doctrine-based course work with intensive practical learning.  Students must complete at least one clinic, one upper-level writing course, one global perspectives course, and one course within our Law Firm Program, an innovative simulated law-firm practicum.  Detroit Mercy Law also offers a Dual J.D. program with the University of Windsor in Canada, in which students earn both an American and a Canadian law degree in three years while gaining a comprehensive understanding of two distinct legal systems.  Interested Dual J.D. students are fully integrated into upper-level U.S. courses.  The program’s first-year U.S. Property Law module could form a component of the teaching package if desired.

Detroit Mercy Law is located one block from the riverfront in Downtown Detroit, within walking distance of federal, state, and municipal courts, the region’s largest law firms, and major corporations such as General Motors, Quicken Loans, and Comerica Bank.  The School of Law is also uniquely situated two blocks from the Detroit-Windsor Tunnel, an international border crossing linking Detroit with Windsor and Canada. 

Detroit offers a dynamic variety of culinary, cultural, entertainment, and sporting attractions.  See https://www.youtube.com/watch?v=DO4J_PC1b5M and learn more at https://www.nytimes.com/2017/11/20/travel/detroit-michigan-downtown.html.

Michigan’s largest, most comprehensive private university, University of Detroit Mercy is an independent Catholic institution of higher education sponsored by the Religious Sisters of Mercy and Society of Jesus.  The university seeks qualified candidates who will contribute to the University's urban mission, commitment to diversity, and tradition of scholarly excellence.  University of Detroit Mercy is an Equal Opportunity Affirmative Action Employer with a diverse faculty and student body and welcomes persons of all backgrounds.

June 24, 2019 in Faculty Positions -- Permanent | Permalink | Comments (0)

1968 Ford Mustang that was Parked Over 40 Years Sold with Previous Owner's Remains Inside

GtAfter James passed away, his best friend Bruce bought his 1968 Mustang from his family. They transported it from the Florida barn it had been stored in for decades to North Carolina. Bruce decided he did not have the time or means to fix it up, so he put it up for sale on Craigslist. That is where Zach Taylor, a car collector out of Georgia, spotted the car.

Zach bought the Mustang for $7,000, even after Bruce told him the mason jar of ash was James' cremated remains. He also decided the car was too much work and placed it for sale as well, this time selling it to a UK restoration company, Corner Classics, for $23,000.

The owner of the shop, Colin Budden, says that the jar containing the ashes of James was in the center console when it arrived. He is still comtemplating about what to do with it, may figure out a way to work the ashes into the chassis so that James will remain with the car forever after the job is done six months to a year from now.

See Gary Gastelu, 1968 Ford Mustang that was Parked Over 40 Years Sold with Previous Owner's Remains Inside, Fox News, June 13, 2019.

Special thanks to Jerry Cooper for bringing this article to my attention.

June 24, 2019 in Current Events, Estate Planning - Generally, Travel | Permalink | Comments (1)

Daughters Stunned After Father’s Body, 3 Others Found Unrefrigerated at Indiana Funeral Home

CasketDuane Nance recently died of cancer at the age of 56 and his two daughters, Amber Stout and Ashly Nance, held a viewing for him on June 12 at Porter Funeral Home. Last Monday, they were told the death certificate would be delayed because their father was cremated.

However, this week the Amber and Ashley were stunned to receive a surprising phone call - their father's body was one of four found in the back of the funeral home decomposing after the business was served with a federal search warrant. It was also revealed 11 decedents had not been issued death certificates. The investigation into the funeral home had been initiated because the director, 62 year old Kevin Porter, was operating with an expired license.

The investigation is ongoing, but the daughter's say the healing process has already begun. Their father’s remains are being handled by Young-Nichols Funeral Home, free of charge.

See Daughters Stunned After Father’s Body, 3 Others Found Unrefrigerated at Indiana Funeral Home, KOLD.com, June 23, 2019.

June 24, 2019 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Saturday, June 22, 2019

Article on Trusting Marriage

WeddingcakeAllison Anna Tait recently published an Article entitled, Trusting Marriage, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Marriage settlements are back. Complex trusts intended to protect family fortunes were once the centerpiece of wedding planning and family negotiations. In more modern times, these trust-based settlements ceded their popularity to premarital contracting and the prenuptial agreement. But in recent years, new trust forms with unprecedented asset protection features have prompted a resurgence of trust usage in marriage planning. Playing on notions of family money and legacy building, these new asset-protection trusts function much like their predecessors, except in one noteworthy respect. Conventional trusts have always provided asset protection based on the notion of third-party freedom of disposition. The new marriage trusts give asset protection to trusts created by a first-party to the marriage. Accordingly, one spouse can create an asset protection trust—for his or her exclusive benefit using what is potentially marital property—without the knowledge of the other spouse. That individual spouses are seeking new ways to protect wealth is not necessarily surprising. The new powers being given to individual spouses to shelter assets within marriage are, nevertheless, alarming. In practice, the new trusts are disconcerting because they allow for a significant amount of unilateral decision-making. In theory, the new trusts are troubling because they disrupt the precarious equilibrium that exists between two competing value-spheres: family wealth preservation and marital partnership. This Article proposes a distinctive framework, based on the notion of competing value-spheres, for assessing the growing phenomenon of asset protection trusts in marriage and concludes that these trusts represent an invalid incursion of wealth preservation into the realm of modern marital partnership. That is to say, the new asset protection trusts undermine personal trust and financial transparency within marriage.

June 22, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Casey Kasem’s Daughter Wants to Bring Star’s Body Back from Norway, Stepmother Denies Elder Abuse Allegations

CaseyCasey Kasem, the esteemed disk jockey, passed away in 2014 at the age of 82, but the drama swirling amongst his family has yet to settle down. His daughter, Kerri, wants to have his body returned to the United States even though he was buried in Norway 6 months after his death. She also alleges that her stepmother, Jean, abused her father while he was suffering from dementia and hindered Kerri and other friends and relatives from visiting him.

In 2013, Kerri and a dozen other individuals held signs outside of Casey's Los Angeles mansion, demanding Jean to allow them access to him as he suffered from failing health. Kerri said that her and her siblings had not been able to see their father in more than three months. Jean denied the claim, instead stating that she was simply giving her husband the privacy that he craved. There were many other allegations tossed back and forth between Kerri and Jean, resulting in Jean being stripped of control over Casey's healthcare decisions in 2014 after a Washington judge decided she had not acted in his best interests and awarded Kerri and conservatorship. 

Kerri claimed she is eager to confront her stepmother in court again and that once and for all, she will set the record straight.

See Stephanie Nolasco, Casey Kasem’s Daughter Wants to Bring Star’s Body Back from Norway, Stepmother Denies Elder Abuse Allegations, Fox News, June 18, 2019.

June 22, 2019 in Current Events, Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Music, New Cases, Television | Permalink | Comments (0)

Friday, June 21, 2019

Farrah Fawcett's Last Words were Son's Name

FawcettIt has been 10 years since Charlie's Angel actress Farrah Fawcett passed away from cancer at St. John’s Health Center in Los Angeles at the age of 62, but it has now been revealed what the late beauty's last words were. Mela Murphy, a long-time friend of the actress, claims that she repeated her only son's name over and over, Redmond.

Redmond O'Neil, 34, is the son of the late actress and Ryan O'Neil. At the time of Fawcett's death Redmond had been struggling with drug addiction and had been in prison for drug charges.

Fawcett made her battle with cancer public, even chronicling her fight in the documentary “Farrah’s Story,” which she co-produced alongside her friend Alana Stewart. A couple of years before her death, she launched The Farrah Fawcett Foundation, which “funds HPV-related cancer research, prevention and education, and provides patient assistance for those in need.”

See Stephanie Nolasco, Farrah Fawcett’s Pal Says the Late ‘Charlie’s Angels’ Star’s Last Words were her Son’s Name, Fox News, June 20, 2019.

June 21, 2019 in Current Affairs, Estate Planning - Generally, Television | Permalink | Comments (0)

SCOTUS Decides North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust

SCOTUSEarlier today, June 21, 2019, the Supreme Court of the United States decided North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust. By a 9-0 margin (7 joining the majority and 2 strong concurring opinions), the court decided that North Carolina cannot tax nonresident trust payments.

Here is an excerpt from the opinion:

This case is about the limits of a State’s power to tax a trust. North Carolina imposes a tax on any trust income that “is for the benefit of ” a North Carolina resident. N. C. Gen. Stat. Ann. §105–160.2 (2017). The North Carolina courts interpret this law to mean that a trust owes income tax to North Carolina whenever the trust’s beneficiaries live in the State, even if—as is the case here—those beneficiaries received no income from the trust in the relevant tax year, had no right to demand income from the trust in that year, and could not count on ever receiving income from the trust. The North Carolina courts held the tax to be unconstitutional when assessed in such a case because the State lacks the minimum connection with the object of its tax that the Constitution requires. We agree and affirm. As applied in these circumstances, the State’s tax violates the Due Process Clause of the Fourteenth Amendment.

June 21, 2019 in New Cases, Trusts | Permalink | Comments (0)