Wills, Trusts & Estates Prof Blog

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

Saturday, November 30, 2019

Article on Supported Decision-Making: A New Approach for Older Clients with Cognitive Impairment

BrainscanMargaret Castles published an Article entitled, Supported Decision-Making: A New Approach for Older Clients with Cognitive Impairment, Elder Law eJournal (2018). Provided below is the abstract to the Article.

There has been a flurry of law reform activity around elder rights in the last few years. In 2017 the Australian Law Reform Commission’s Report “Elder Abuse – a National Legal Response” made far reaching recommendations. Earlier this year the Commonwealth Government published the results of its Inquiry into the Quality of Residential Aged Care in Australia, and has recently announced a Royal Commission into Aged Care Quality and Safety.

 

November 30, 2019 in Articles, Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Celebrity Estate Problems Offer a Cautionary Tale — and Not Just for the Rich and Famous

PrinceNot having an estate plan that clearly details how a person wants to dispose of the entirety of their worldly possessions can cause messy fights between family members. If you are famous like Aretha Franklin or Prince those fights can be on the national stage for millions to watch. For the common man, the embarrasment, angst, and cost can still be painful, and unfortunately it happens everyday across the county amongst probate courts. 

The view that estate planning is only for the wealthy is changing, yet many Americans have not taken the most basic steps to ensure that their descendants and loved ones are properly provided for in the future. A recent survey by Edward Jones found that while 77% of Americans believe that estate and legacy strategies are important for everyone, only 24% of Americans have even taken the time to designate beneficiaries for all of their accounts, leaving the simplest of legacy decisions up in the air.

See Celebrity Estate Problems Offer a Cautionary Tale — and Not Just for the Rich and Famous, Market Watch, November 29, 2019.

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

November 30, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, Music, Trusts, Wills | Permalink | Comments (0)

Friday, November 29, 2019

The Statutory Liberalization of Trust Law Across 152 Jurisdictions: Leaders, Laggards and the Market for Fiduciary Services

ScalegavelAdam S. Hofri-Winogradow recently published an Article entitled, The Statutory Liberalization of Trust Law Across 152 Jurisdictions: Leaders, Laggards and the Market for Fiduciary Services, Wills, Trusts, & Estates Law eJournal (2019). Provided below is the abstract of the Article.

This article reports the findings of the first systematic overview of the statutory liberalization of trust law worldwide. Using a groundbreaking, manually collected, database of the trust legislation of every jurisdiction which has a trust regime respecting 22 trust law variables, I hand coded each jurisdiction’s treatments of each variable since 1925 for their relative liberality. Aggregating all jurisdictions’ scores regarding all variables, I produced a “trust liberality score” for each jurisdiction/year, expressing the extent to which trust law has been liberalized by each jurisdiction by each year.

Results show the United States to be the global leader in trust law liberality: 17 of the 20 jurisdictions which have the most liberal trust laws are American states. Trust law liberalization in the U.S. is a result of the widespread adoption of the Uniform Trust Code, which includes many highly liberal positions, among the states, as well as of many states having followed an offshore dynamic in adopting highly permissive positions in order to draw users from out of state to resident service providers. The trust laws of many American states are more liberal than those of small offshore island jurisdictions. Even the laws of such relatively conservative American states, on trust matters, as New York and California are quite liberal by global standards. Much of the recent global increase in trust law liberality occurred between 1988-2016.

Multivariate regression analysis of U.S. data shows that the statutory liberalization of trust law has had no effect on several indicia for the success of service provision to trusts as a commercial enterprise. It is especially clear that reforms seen as pandering to trust users’ interests at great social cost, such as self-settled spendthrift trusts and perpetual trusts, all in order to create or sustain demand for professional services in the trust context, have had no impact on any of these indicia. As an exception to the general finding of a null result, some findings with marginal statistical significance may show that law reforms which reduced trustees’ exposure to liability and entrenched their entitlement to remuneration led to a decline in their earnings per trust. Those reforms are also weakly associated with an increase in trust income. It is therefore possible that reforms widely seen as preferring trustees over their clients have resulted in trustees providing a better service at lower cost.

November 29, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Travel, Trusts | Permalink | Comments (0)

Thursday, November 28, 2019

Your Slice of the Pizza – Only Directly Inherited Asset Qualifies as Separate Property

PizzasliceMany states that are community property states declare that property that is inherited is categorized as separate property rather than part of the community estate. In California, the 5th Court of Appeals has ruled that for assets to remain separate property, they generally must have been acquired through direct inheritance, meaning inherited from one's parents.

George Deluca settled with his two siblings after numerous years over a trust his father had that held his real estate after the father died in 1990. In 1996, George agreed to waive any right or claim to any other property of the trust in exchange for title to three properties. In 1997, George and his sister entered into an “Amendment to Settlement Agreement,” under which the sister agreed to transfer the Florida Street property (an apartment complex) that had been allocated to her to George in exchange for cash and a promissory note. In 2011, George and his wife divorced, and George claimed that the Florida Street property was separate property as it was inherited. The San Diego Superior Court judge agreed, and the wife appealed.

While George and his sister chose to characterize his acquisition of the Florida Street property as an “amendment” to their trust litigation settlement from the year prior, the Court of Appeals looked through that description. The court found that George purchased the Florida Street property from the sister at a time when she had sole ownership of it. Thus, George’s acquisition could not be deemed an “inheritance or devise” and instead the general community property presumption controlled.

A negotiated allocation of assets from a trust or estate is like slicing up a pizza. As a beneficiary, you bargain for and get to keep as your separate property the particular slice you receive. However, if you later acquire (purchase, are gifted, etc.) another person’s slice of the same pizza, it presumptively will be one that you must share as community property with your spouse.

See Jeff Galvin, Your Slice of the Pizza – Only Directly Inherited Asset Qualifies as Separate Property, Trust on Trial, November 25, 2019.

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

November 28, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (2)

Wednesday, November 27, 2019

Thanksgiving for Caregiving

CaregiverNovember is National Family Caregivers Month, celebrating the more than 40 million people that give unpaid care, three-quarters which is to a family member. Many of these caregivers give so much of their time while also working full-time and providing for their own children. In addition to the $7,000 per year in out-of-pocket expenses, caregivers stand to lose wages and Social Security benefits of approximately $234,000 for male caregivers and $324,000 for women.

So how can these important and precious caregivers balance their lives with the caring?

  • Consider possible financial support, and not necessarily straight from the one they are caring for.
  • Share the burden, either from another family member or other source, whether professional or otherwise.
  • Improve workplace support for caregivers at both the federal and employer levels.
  • Improve support for the care recipient.
  • Technology advances that can help with support and caregiving.

See Naomi Cahn, Thanksgiving for Caregiving, November 21, 2019.

November 27, 2019 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Working Interdisciplinary Networks of Guardianship Stakeholders: WINGS State Replication Guide 2019

WINGSThe American Bar Association Commission on Law and Aging has completed a new guardianship reform publication entitled Working Interdisciplinary Networks of Guardianship Stakeholders: WINGS State Replication Guide 2019.

This replication guide is a resource for states seeking to establish or enhance a Working Interdisciplinary Network of Guardianship Stakeholders or WINGS. If your state does not have such a court-stakeholder partnership, this guide outlines 10 hallmarks of WINGS and 10 steps for creating one. If your state already has a WINGS or similar reform group, the guide includes tips for strengthening, sustaining and evaluating it.

If guardianship is going to change, an ongoing collective effort by courts and a broad range of community stakeholders will be required. We hope this Guide will help.

November 27, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Monday, November 25, 2019

Systemic IRA Trust Compliance Issue Can Have Big Tax and Penalty Impact

IRAPost-death rules governing IRAs, particularly those involving trusts, are complicated and if not strictly adhered to can lead to severe ramifications for the intended beneficiaries. One such rule, often referred to as the “documentation rule” may not seem that complicated at first glance, but failure to meet its requirements can result in confiscatory penalties, as noted by our IRA expert commentator, Seymour Goldberg. Mr. Goldberg is the senior partner in the law firm of Goldberg & Goldberg, P.C. in Long Island, New York. He is Professor Emeritus of Accounting, Law and Taxation at Long Island University and has conducted continuing education programs with the IRS and well over 50 such programs over the last 15 years or more for practitioners (attorneys and CPAs) on IRA compliance issues. He has written two practitioner guides for the American Bar Association on IRA Compliance Issues as well. He has also written dozens of articles and several manuals on the subject area. Mr. Goldberg can be reached at 516-222-0422 or by email at info.goldbergira@gmail.com. You may also visit his website at TrustEstateProbate.com.

See Seymour Goldberg, Systemic IRA Trust Compliance Issue Can Have Big Tax and Penalty Impact, Estate Planning Review - The Journal, November 19, 2019.

November 25, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

Some Extra Planning for Thanksgiving

Thanksgiving

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

November 25, 2019 in Current Affairs, Estate Planning - Generally, Humor, Wills | Permalink | Comments (0)

Sunday, November 24, 2019

When it Comes to Gifting, There's No Time Like the Present

GiftOften, allowing your loved ones to have gifts before your death can have tremendous benefits, not least of all watching them enjoying the presents during your lifetime. If you have an estate that is more than the federal exemption amount which, as of 2019, is $11.4 million, giving away assets before you pass can lower any estate taxes due. Any amount lower than $15,000 per year is tax-free, and an be used as an effective way to gradually help children and grandchildren understand and appreciate their family’s wealth.

From a tax perspective, a downside of gifting assets during your lifetime is that assets that have appreciated in value do not receive a “step-up” income tax basis. This means if you gift appreciated property or securities, the recipient will be subject to capital gains tax on the built-in appreciation when they sell the assets. It is important to consider when to gift these types of assets so that the loved one can receive the greatest benefit, rather than a possible burden.

There are numerous other vehicles that can be utilized to gift children and grandchildren assets or even funds during ones lifetime, including:

  • 529 College Savings Plans, which acts similar to a retirement account in that the money placed in it grows without being subject to federal income tax.
  • Uniform Transfer to Minor Act accounts, and any property placed in the trust are taxes at the child's tax bracket
  • Delaware Dynasty Trusts, which are notorious (or famous, however you choose to look at it) for lasting in perpetuity.

See When it Comes to Gifting, There's No Time Like the Present, Franklin Templeton, November 18, 2019.

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

November 24, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Saturday, November 23, 2019

Re-Imagining the Business Trust As a Sustainable Business Form

Lee-ford TrittProf. Lee-ford Tritt and Ryan Scott Teschner have recently posted their innovative article, Re-Imagining the Business Trust As a Sustainable Business Form on SSRN. Here is the article's abstract:

An important policy debate has emerged in the United States concerning how business should evolve to encapsulate more fully the burgeoning sustainability-conscious management paradigm. At issue in this debate is the proper role of business in society. The modern trend in business is to consider more than just shareholder profits. In the United States, companies are increasingly incorporating sustainability practices into their business models. However, by practice and by law, the traditional corporate management paradigm—the shareholder primacy model—holds that the singular social responsibility of business is to maximize shareholder interests, principally shareholder profits. This model conflicts with the sustainability management paradigm, which reflects the view that business should maximize value for society. Some states have realized the shortcomings of the traditional corporate management model and have enacted constituency statutes or created new corporate form practices. However, these statutes and corporate forms have their own shortcomings. Historically, business trusts have been used to circumvent overly-restrictive corporate organizational and legal limitations. Entrepreneurs should once again look to this business form to pursue sustainable practices while maintaining profitability. Due to business trusts’ structure and flexibility, they are an ideal vehicle for sustainable businesses. Accordingly, by drawing upon trust law and corporate law, this Article articulates an interdisciplinary, systematic application of business trusts as an alternative organizational form to corporations for the socially-conscious business management construct.

November 23, 2019 in Articles, Trusts | Permalink | Comments (0)