Wills, Trusts & Estates Prof Blog

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

Friday, December 25, 2020

The GAO Reviews QDROs

The Government Accountability Office (GAO) prepared a report for the Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions about Qualified Domestic Relations Orders (QDROs). The report on QDROs was prepared in July 2020. 

"QDROs are court-issued orders that allow a divorced spouse (or in rare cases a child) to receive a portion of a participant’s qualified retirement plan benefit. A QDRO is one of the few ways in which a participant’s qualified retirement benefit can be assigned or alienated." 

The report contained two key findings to encourage the Department of Labor to: 

 

  • Find ways to collect data on the fees that defined contribution plans charge to participants or alternate payees for reviewing QDROs
  • Improve divorcing parties’ access to information about the QDRO process.

 

It may be necessary for you to review your current plan to see what the current fee your plan charges for a QDRO. 

See The GAO Reviews QDROs, Faegre Drinker, November 12, 2020. 

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

December 25, 2020 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Modern death: new ways of paying tribute

Estate planningThere are many ways to pay tribute to those who pass, and the traditions vary throughout cultures. From ordinary funerals to pyramids and mausoleums, memorials have varied for centuries. One thing that has remained the same: when people are important to you, the monuments will be elaborate and meaningful. 

As the pandemic continues to plague the world, memorials have been a bit different. The wealthy have not been able to memorialize their loved ones in the same elaborate ways. Thus, wealthy memorials—and others—have changed drastically. "The emphasis is also shifting from the physical construction to the experience, at least for the mourners left behind. Memorials are still elaborate but in a very different way."

According to Kevin Toolis, the wealthy have always spent more on death events. However, with environmental concerns and religious traditions, memorials have continued to evolve. 

Toolis stated, "In 2020, the coronavirus pandemic has made people, particularly in the west, even more afraid of death, exacerbated by the fear of dying alone, and with bodies regarded as biologically contaminated." 

Either way, memorialization has remained a tradition and a ritual for the living. 

See Helen Barrett, Modern death: new ways of paying tribute, Financial Times, November 23, 2020. 

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

December 25, 2020 in Current Affairs, Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (1)

Thursday, December 24, 2020

Article: Introduction: The Oxford Handbook of the New Private Law

Andrew S. Gold, John C. Goldberg, Daniel B. Kelly, Emily L. Sherwin, and Henry E. Smith recently published an article entitled, Introduction: The Oxford Handbook of the New Private Law, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning

“Private law” embraces the traditional common law subjects (property, contracts, and torts), as well as adjacent more statutory areas such as intellectual property and commercial law. It also includes important areas that have been neglected in the United States but are beginning to make a comeback. These include unjust enrichment, restitution, equity, and remedies more generally. “Private law” can also mean private law as a whole, which invites consideration of issues such as the public-private distinction, the similarities and differences between the various areas of private law, and the institutional framework supporting private law – including courts, arbitrators, and even custom.

The New Private Law is an approach to these subjects that aims to reinvigorate the study of private law by moving beyond reductively instrumentalist policy evaluation and narrow, rule-by-rule, doctrine-by-doctrine analysis, so as to consider and capture how private law’s various features fit and work together, as well as the normative underpinnings of these larger structures. This movement has begun resuscitating the notion of private law itself in the United States and has brought an interdisciplinary perspective to the more traditional, doctrinal approach prevalent in Commonwealth countries. The Handbook embraces a broad range of perspectives to private law – including philosophical, economic, historical, psychological, to name a few – yet it offers a unifying theme of seriousness about the structure and content of private law. This Introduction introduces the New Private Law and briefly summarizes the chapters in the volume.

December 24, 2020 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Article: Stock Broker Mutation

Robert Flannigan recently published an article entitled,  Stock Broker Mutation, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning

The principle that agents are status fiduciaries does not apply to stock brokers in Canada. Though brokers are agents with respect to their trading function, the Supreme Court has said that their agent status does not make them accountable as status fiduciaries. I will explain how that mutation developed. I will show that the Supreme Court misconstrued the prior law, and that there is no present justification for the lesser accountability of stock brokers.

December 24, 2020 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, December 23, 2020

Article: Obligations And Powers Of Superannuation Trustees Concerning Situations Of Actual Or Possible Conflict

Joseph Campbell recently published an article entitled, Obligations And Powers Of Superannuation Trustees Concerning Situations Of Actual Or Possible Conflict, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning 

Part 1 summarises the present status as a matter of precedent in Australia of the general law rule that a fiduciary not be in a situation of conflict, the meaning of being “in a situation of conflict”, and the recognised circumstances in which there is an exception to the rule. It also criticises the application of the rule to a superannuation trustee in Jones v AMP Perpetual Trustee Co NZ Ltd . Part 2 considers the relationship of the pre-existing general law and statute law governing trusts to the provisions of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”). Part 3 considers the effect of the initial introduction of the SIS Act on the application of the no-conflicts rule to superannuation trusts. Part 4 considers how the replacement of the original statutory covenants in the SIS Act with a set that included express obligations concerning conflicts affects the possible application of the general law no-conflicts rule. It argues that it is still possible, in some circumstances, for the general law no-conflicts rule to apply, and considers the limitations on now amending a trust deed that did not already exclude the no-conflicts duty to amend or limit that duty. Part 4 also considers various aspects of the construction and practical application of the new covenants concerning conflicts, including the role of the prudential standards, and some other statutory amendments that came into operation in 2013 and 2019 that bear upon a trustee’s actions in a situation of conflict. Part 5 provides several miscellaneous examples, discussed with particular reference to outsourcing, of principles that do not mention the word “conflict” but that could need to be taken into account when a superannuation trustee is in a situation of conflict.

December 23, 2020 in Articles, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Article: Legal Consequences of the Flawed Exercise of Scheme Powers

Jessica Hudson and Charles Mitchell recently published an article entitled, Legal Consequences of the Flawed Exercise of Scheme Powers, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning

The paper discusses the powers that are typically conferred on trustees and employers under English occupational pension schemes and Australian superannuation schemes, the legal rules by which the exercise of such powers is governed and the legal consequences of failures to comply with these rules.

December 23, 2020 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, December 22, 2020

Virginia Supreme Court: The Term “Fair Market Value” In Codicil Provides No Certainty As To Price

WillsIn Wilburn v. Mangano, the Virginia Supreme Court considered whether an "option to purchase decedent's tea; property at 'fair market value' provided sufficient certainty as to the sale price to warrant specific performance of a contract for sale." The case was decided on December 10, 2020. 

Jeanne Mangano executed a will in which she left her residence to her three daughters, ("the sisters"). Jeanne granted her son Anthony, an option to purchase the Property from his sisters (the "Option"). According to the will, Anthony could exercise the Option within one year from the probate of Jeanne's will, and at a purchase price equal to the Property's real estate tax assessment in the year of Jeanne's death. 

Jeanne executed a codicil afterwards which revised the purchase price "to an amount equal to the fair market value at the time of my death." Jeanne died in November 2005. 

Anthony decided to exercise the option to purchase and sent a letter to his sisters that was meant to give them legal notice of his intent to exercise the option. The Sisters then filed suit to compel Anthony to purchase the property. "The Sisters obtained two appraisals of the fair market value of the Property as of Jeanne’s death — one valuing the property at $311,000, and the other at $270,000." 

Anthony claimed that there was no enforceable contract because fair market value as of the date of Jeanne's death is not "a sufficiently specific term to establish mutual assent to the Property's purchase price." The circuit court agreed. 

In Virginia, "fair market value" means the price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction." 

The Virginia Supreme Court held that because there was no certainty as to the price set forth in the codicil, along as no way to ascertain it with sufficient certainty, the circuit court decided correctly.

December 22, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Oklahoma Supreme Court: Prioritized Order For Probate Venue Exists in Oklahoma

Estate planningThe Oklahoma Supreme Court "confirmed that the proper venue for the probate of an Oklahoman's estate is the county in which the decedent resided at death—not the most convenient venue for the party to file for probate or where letters might first have been issued." 

Charles Fulks died in February 2013. All of his real and personal property was alleged to be located in Osage County, Oklahoma. Dorothy, Charles' surviving spouse, filed a Petition for Letters of Administration in Nowata County, Oklahoma. Dorothy stated that Charles had died intestate and that there were three children. The three children were identified as Tobi, Kim, and Charles. 

Dorothy failed to disclose residency of Charles in the petition and also did not disclose or claim that Charles had ever lived in Nowata County, Oklahoma.

Before the hearing on the petition, Tammy McPherson filed a special appearance in Nowata County and asked for a continuance. McPherson claimed that she was also a child of the Fulks and asseated that she was an "heir at law." 

Tammy filed a motion to dismiss claiming, "1) decedent did not die intestate; 2) she is a named heir in decedent’s will; 3) all of decedent’s real and personal property was located in Osage County, Oklahoma, and 4) the proper venue for the probate lies in Osage County.  Tammy attached a copy of decedent’s September 26, 2011 will to her filings." 

The Oklahoma Supreme Court held that there is a priority of proper probate venue in Oklahoma and the County in which the decedent resides at death is the proper county for venue. 

See Oklahoma Supreme Court: Prioritized Order For Probate Venue Exists in Oklahoma, Probate Stars, December 15, 2020. 

December 22, 2020 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Monday, December 21, 2020

Webinar: Understanding the IRA Distribution Rules under the Secure Act: Includes Practitioner Issues and IRS Compliance Issues

A webinar program entitled, Understanding the IRA Distribution Rules under the Secure Act: Includes Practitioner Issues and IRS Compliance Issues will be held on December 30, 2020 from 1:00 PM ET to 2:30 PM EST. You can register by clicking on the link above. Provided below is more information on the program. Estate planning

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. 

The Secure Act has many deadline rules that have to be tracked in order to avoid IRS penalties. You must become familiar with these deadlines. In addition, unintended beneficiaries of retirement accounts must be avoided. In his exclusive LISI Webinar, Seymour Goldberg will review the following topics:

  • Common errors in retirement distribution planning
  • Roth IRA taxing issues: Failure to list basis of Roth IRA account on Schedule A of Form 8971 (no exception provided for under the proposed regulations)
  • Why many beneficiary forms are defective
  • Unintended beneficiaries of retirement accounts
  • Customized sample beneficiary forms
  • Advantages of a Trust as the beneficiary of an IRA
  • Disadvantages of a Trust as the beneficiary of an IRA
  • Statute of limitation issues involving IRA penalties
  • Comment letter to IRS and Treasury regarding post-death Roth IRA distributions to trusts. Comment letter discusses lack of adequate disclosure that may trigger an IRS examination of the trust return
  • And much more

SEYMOUR GOLDBERG, CPA, MBA (Taxation), JD, is a senior partner in the law firm of Goldberg & Goldberg, P.C., Melville, New York. Professor Emeritus of Law and Taxation at Long Island University. Former Director of the Tax Institute of the C.W. Post Campus of Long Island University. Recipient of the American Jurisprudence Award in Federal Estate and Gift Taxation from St. John’s University School of Law. CLE instructor for many professional organizations including the New York State Bar Association, American Bar Association, NJICLE, City Bar Center for CLE, local bar associations and law schools. Mr. Goldberg is admitted to practice law in New York State. Authored 4 manuals for the American Bar Association on IRAs and on Trusts. His American Bar Association manual entitled “Can You Trust Your Trust” can be found on Amazon. Mr. Goldberg handles probate matters, tax disputes with the IRS and the IRS appeals office, IRA penalty waivers and New York State Department of Taxation tax disputes. Represents clients in IRS ruling requests (over 75). Wrote an amicus brief in the 2014 inherited IRA Supreme Court Case, Clark v. Rameker. His manuals for the American Bar Association can be found in over 100 law school libraries throughout the United States. He is a member of the Relations with the IRS Committee of the New York State Society of Certified Public Accountants. He was formerly associated with the Internal Revenue Service. Mr. Goldberg has conducted continuing education courses with the IRS on the retirement distribution rules. He has recommended corrections to IRS Publication 590 working pro bono with the IRS and then Congressman Steve Israel. This resulted in IRS revisions and the adoption of IRS Publication 590-A and IRS Publication 590-B. He is the recipient of Outstanding Discussion Leader Awards from both the AICPA and the Foundation for Accounting Education. He has conducted well over 300 CPE programs in the field of taxation including over 100 CPE programs involving IRAs and IRA Compliance issues. Mr. Goldberg has been quoted in the New York Times, Forbes, Fortune, Money Magazine, U.S. News & World Report, Business Week and the Wall Street Journal. He has also been interviewed on CNN, CNBC and WCBS. 

December 21, 2020 in Conferences & CLE, Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

George Clooney once gave 14 friends $1 million each in cash

ClooneyBefore George Clooney settled down and became a family man, he gifted 14 of his closest friends $1 million each—in cash. In an interview with GQ, Clooney shared the details of this generous gift. Before the interview, the story was more of a rumor and at the most an unconfirmed story. 

Clooney stated that he was working on the movie "Gravity" at the time and was being given percentages of the movies in place of a salary. The movie ended up being a big hit, making Clooney a few million dollars. At the time, Clooney wasn't married and had no family, so he gave the money away to his closest friends. 

Clooney stated, "And I thought, you know, without them I don't have any of this," he said of his friends. "And we're all really close, and I just thought, basically, if I get hit by a bus, they're all in the will. So why the f**k am I waiting to get hit by a bus?"

Clooney said that he drove an old van to a warehouse in Los Angeles where they have "giant pallets of cash", filled up bags with $14 million and then invited his friends over. 

Clooney added, "And I just held up a map and I just pointed to all the places I got to go in the world and all the things I've gotten to see because of them," he told GQ. "And I said, 'How do you repay people like that?' And I said, 'Oh, well: How about a million bucks?'"

It certainly pays to be a good friend to George Clooney. 

See, Scottie Andrew, George Clooney once gave 14 friends $1 million each in cash, CNN Entertainment, November 18, 2020. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

December 21, 2020 in Estate Planning - Generally, Humor, Television, Wills | Permalink | Comments (0)