Tuesday, December 31, 2019
Many states in the US are community property states but Florida is not one of them. But community property rights acquired in community property states can be enforced in Florida. In a recent case, Johnson v Townsend, the court determined that community property rights are a claim that must be pursued, not an automatic right in Florida.
The case involved a married couple that moved from Texas (a community property state) to Florida. The husband died and was survived by his wife and his children from a prior marriage. The husband's will was admitted to probate and the wife was appointed personal representative, in which she published a notice to all creditors against the estate that same month. 2 and a half years later, she filed a claim under the Florida Uniform Disposition of Community Property Rights at Death Act. The wife sought to confirm and effectuate her vested 50% community property interest in an investment asset acquired and titled in the decedent’s name while the decedent and the wife were domiciled in Texas. The children objected.
The Act does not contain a deadline to file a community property claim against an estate, but creditor claims do have deadline depending on the type. The wife argued the deadlines did not apply because as community property, the assets were never the husband's, while the children argue the deadlines did apply as the assets were within the decedent's estate. The court agreed with the children and ordered that the deadline for community property claims were 3 months after the personal representative (the wife) published the notice to creditors.
See Community Property Rights In Florida: File a Creditor Claim, Probate Stars, December 4, 2019.
Monday, December 30, 2019
Seymour Goldberg, senior partner at Goldberg & Goldberg, a law firm in Melville, NY, has written two practitioner guides for the American Bar Association on IRA compliance issues. He is concerned about IRA trust violations under the IRS rules. An IRA trust is a trust that is the beneficiary of an IRA.
The issue involves timely delivery of certain paperwork to the institution that maintains the decedent’s IRA account after the death of the IRA owner. According to Goldberg’s conversations with the SEC, that issue is an IRS compliance issue, over which the SEC has no jurisdiction.
For more information, see here.
Sunday, December 29, 2019
Richard Shaver was a man that enjoyed planning ahead but not as far into the future as his final years. He was more flippant about the subject of his death, commenting that he wanted a party with booze in lieu of a funeral and even going so far as joking about overdosing on pills. He was adamant on one thing - he did not want to go to "The Place," his term for a nursing home, and he did not want to send his wife there, Alma, even after she was deteriorating from Alzheimer's disease.
The couple had known each other since they were children and had eloped shortly after high school. During their 60 years of marriage they raised three daughters, but Richard's focus and adoration was always on his wife. When Alma was first diagnosed with Alzheimer's he did not discuss it with his children, saying that he was "taking care of it." He refused in-home care, a cleaning service, or the offer of moving closer to one of his children to make things easier. When Alma's mind became so broken that she could no longer remember her husband and her children, she told a friend and neighbor, Valerie Dominioni, "We have to go away. You understand, don't you?" An a Sunday afternoon in June, while Alma was sleeping, Richard shot her in the back of the head before laying down and putting the barrel in his own mouth.
Two weeks after their bodies were discovered, their granddaughter, Alissa Ryan, got married. The only note that Richard had left was addressed to her. “May you both have many years of happiness,” it read. “May life be good to you.”
See Corina Knoll, Sweethearts Forever. Then Came Alzheimer’s, Murder and Suicide, New York Times, December 29, 2019.
Saturday, December 28, 2019
As we turn the page to 2020, Estate Planning Smarts marks a milestone. It's been a decade since I published the first edition of this consumer-oriented book. At the time, I promised to keep readers current with future editions and free updates that could be downloaded from the book's website. In four editions and numerous updates I've chronicled the developments that may affect your finances, and those of your heirs.
You can download the latest, free, update to the fourth edition here. This update replaces earlier ones. It reflects the current state of the law, including the Setting Every Community Up for Retirement Enhancement, or SECURE, Act, passed just before the holiday recess. Like earlier updates, this one alerts you to key changes that may influence your planning.
Nearly 2.5 million Americans die each year, and many haven't signed the basic documents needed to protect loved ones. If you are one of those people, make a New Year's resolution to tackle this subject -- and keep it! Otherwise, I hope you will use this update to revisit your plan in light of recent changes.
To be notified of future updates and books, please keep your contact information current. You might also want to check out my latest book, Four Seasons in a Day: Travel, Transitions and Letting Go of the Place We Call Home. It, too, confronts the subject of mortality, but with a different twist: by reminding us to make the most of the time we have left. The Wall Street Journal named it one of "the best books of 2017 about healthy aging."
My blog is now well established in a new home, which also comprises an archive of my work. I've expanded my coverage to include travel and the sharing economy, along with other topics that have been continuing themes in my writing, including: personal finance and work as a tool for self-actualization. Life doesn't stand still, and neither should your estate planning.
Happy New Year!
Deborah L. Jacobs
Eva Gordon of Seattle was a shrewd investor, buying up stock early in famed north-west companies such as Starbucks, Nordstrom, and Microsoft. She died last year at the ripe old age of 105 and just a month ago her estate just sent 17 community colleges across Washington state each $550,000. Many of the colleges were shocked as it was one of the largest donations the colleges have ever received.
John Jacobs, 61, Gordon’s godson and personal representative for the estate, said, “She was a very intelligent woman, meticulous record keeper, very organized, and had the wherewithal to buy stocks and hold on to them that a lot of people at that age didn’t really do too much." Surprisingly, though, she never attended college - something she regretted later in life, and regularly donated to and volunteered for children’s and educational programs.
Eva moved to Seattle after high school and worked as a trading assistant at an investment firm before marrying a stockbroker, Ed Gordon, in 1964. The couple was modest and frugal and did not have any children. Her fortune increased in the last few years due to the stocks and she bequeathed virtually all of her money to the community colleges, while a very small portion went to other educational or health entities.
See Hallie Golden, Woman Who Lived to 105 Left Nearly $10M to Community Colleges, The Guardian, December 27, 2019.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Friday, December 27, 2019
Though doctors could determine that a person had Alzheimer's disease by particular symptoms, a formal diagnosis could not be performed until examining the brain during an autopsy. This may be a thing of the past, with two diagnostics tests on the horizon - a blood test that can detect the protein beta amyloid and a brain scan that can detect the protein tau.
These types of diagnostic testing may become more widespread, and with proteins developing on a person's brain before symptoms of the disease appear, a diagnosis can be formed before a patient develops Alzheimer's most feared symptom - dementia. A positive test could help a person get their affairs in order and form a plan for their future. And a drug company, Biogen, claims to have the first treatment that may slow the course of the disease if begun early enough. But how would knowing that one day you may not recognize any of your loved ones affect your choices today? Medical insurance companies are banned from denying coverage for patients with Alzheimer's diagnoses, but nothing is stopping long-term care insurers or even life insurers from denying them.
Dr. Daniel Gibbs, 68, a neurologist in Portland, noticed little slip ups in his memory and decided to get brain scans for beta amyloid and partake in cognitive tests. He was diagnosed as being in the early stages of Alzheimer's disease, and now has severe worries about his future, going so far as telling his family that if he gets something like pneumonia, they should withhold treatment.
See Gina Kolata, Alzheimer’s Tests Soon May Be Common. Should You Get One?, New York Times, December 20, 2019.
Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.
Effective Use of IRA Assets in Tax and Estate Planning After the Secure Act (Includes IRS Compliance)
Seymour Goldberg, CPA, MBA, JD, a senior partner in the law firm of Goldberg & Goldberg, P.C., Long Island, New York, will be presenting a program with the following description:
Many taxpayers have accumulated a considerable amount of assets in their retirement accounts. These assets may be in their 401(k), another type of qualified plan, a 403(b) arrangement, a 457 governmental plan, a traditional IRA and a Roth IRA. Estate and income tax planning are more important than ever, especially under the Secure Act, when advising a client that has substantial retirement type assets. This program covers many of the rules that you need to know when implementing an estate plan for the client that has substantial retirement assets. IRS Compliance is now a major issue in retirement distribution planning for IRA owners and IRA beneficiaries.
For more information about the program and how to register, follow this link: Download Effective Use of IRA Assets in Tax and Estate Planning - January brochure.
Thursday, December 26, 2019
When Duke William X died in 1137, his teenage daughter Eleanor became the duchess of Aquitaine, Gascony and Poitou, spanning roughly half of the land mass of modern day France. Whoever married her would gain those lands, and in that day suitors were not above kidnapping a bride. So Eleanor was kept locked in a castle until the right husband came along, since she was essentially the key to owning those lands.
When Gerry Cotton passed away this past January, no one could have guessed that his body (or more accurately, what he held in his mind) was the key to $137,000,000, or $250,000,000 according to some reports. He was the founder of Canada’s largest bitcoin exchange, QuadrigaCX, and it has come to light that he was the only person that knew of the password to unlock a PC to access the funds. Cotton died at only 30 in India of Crohn's disease. Rumors that he may have faked his death have lead to investors demanding that the body be exhumed for DNA testing.
This dreadful situation can be used as an example on why everyone should maintain a digital estate plan. Many bank accounts can be accessed easier and quicker digitally, and there are other digital assets to consider. Leaving a list of passwords with an estate attorney or professional representative may make things go smoother after your death.
See Theodore F. Claypoole, His Body Was a Key. What is Yours?, National Law Review, December 26, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
Markus G. Puder & Anton Rudokvas recently published an Article entitled, How Trust-Like Is Russia's Fiduciary Management? Answers from Louisiana, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.
This article introduces Russia's legal concept of “fiduciary management” - a somewhat equivalent concept to the trust in common legal systems - to American legal audiences. It positions fiduciary management within the spectrum of trust-like devices that have been brought into civilian ambits by way of reference to Louisiana's trust law. After discussing trust operations in Louisiana, this article reviews Russia's experiences with conceptions of trust. Through the prism of Louisiana trust law, this article then analyzes the theoretical underpinnings of fiduciary management in Russia. In further exploration of the degree of operational comparability of fiduciary management to the trust in actual practice, the authors explore examples from Russian jurisprudence. This article concludes with perspectives for the rise of a trust-like device more closely aligned with the Anglo-American template in Russia.
CLE on Effective Use of IRA Assets in Tax and Estate Planning After the Secure Act (Includes IRS Compliance Issues)
Seymour Goldberg is presenting a seminar entitled, Effective Use of IRA Assets in Tax and Estate Planning After the Secure Act (Includes IRS Compliance Issues), on Wednesday, January 29, 2020 at Melville Corporate Center III, Master Conference Room, at 324 South Service Road, Melville, NY. Provided below is a description of the event.
Many taxpayers have accumulated a considerable amount of assets in their retirement accounts. These assets may be in their 401(k), another type of qualified plan, a 403(b) arrangement, a 457 governmental plan, a traditional IRA and a Roth IRA.
Estate and income tax planning are more important than ever, especially under the Secure Act, when advising a client that has substantial retirement type assets. This program covers many of the rules that you need to know when implementing an estate plan for the client that has substantial retirement assets. IRS Compliance is now a major issue in retirement distribution planning for IRA owners and IRA beneficiaries.
Some topics included in this program:
- Brand new world of retirement distribution planning
- Effective date of changes in the rules
- Transition rules and partial retroactive rule provisions
- Retroactive effect on IRA trusts throughout the United States that have not been amended or redone
- No grandfather rule for IRA trusts for IRA owners who pass away on or after January 1, 2020
- Effective use of Roth IRA trusts going forward to save the day
- New required beginning date o Special rules for special categories of beneficiaries
- Use of 10 year trusts for designated beneficiaries
- Use of a life expectancy trust plus 10 year bonus payout period for eligible designated beneficiaries
- The 10 year rule versus the life expectancy rule plus the 10 year bonus rule (without trusts)
- Repeal of maximum age rule for making traditional IRA contributions
- The federal age of majority rule for children
- Potential massive IRS penalties for not tracking the new rules
- Need for new practitioner specialty (IRA Compliance Specialist)
- Default beneficiary issues
For more information on how to attend the event, see here.