Wills, Trusts & Estates Prof Blog

Here's Where The 4% Withdrawal Rate Fails

"A 4% retirement asset withdrawal rate remains the standard for financial planning, but it doesn't hold up against every scenario." 

With longevity, volatility, and inflation, the usefulness of the 4% rule for retirement distributions. 

A new white paper that was released by the Alliance for Lifetime Income. The paper is called "Planning for Retirement Income Within a Increasingly Volatile and Uncertain World," and discusses common retirement planning income assumptions. 

The paper was written by Colin Devine and Ken Mungan who stated in the paper, “[t]he results provided by our research and models present substantial cause for concern, particularly within a world where increasing volatility has arguably become the norm.”

The authors of the paper found that, under normal conditions, the 4% rate is strong and "it poses a small 16% risk that retirees will run out of assets within the first 20 years of retirement." 

Devine and Munger found that the 4% rule could be faulty by extending their research beyond the 20-year point in retirement. "In each portfolio allocation assumption, the failure rate of the 4% rule crossed the 50% threshold somewhere between a person’s 30^th and 40^th year of retirement." 

The authors further mentioned that looking at a person's average life expectancy is not enough since "half of the population could be expected to exceed it. . .Extending the time horizon out to 25, 30, 35 or even 40 years suggests that for each of these time periods there is simply much too high a risk of outliving income.”

See Christopher Robbins, Here's Where The 4% Withdrawal Rate Fails, Financial Advisor, March 8, 2021. 

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

The American College of Trust and Estate Counsel Elects 43 New Fellows to the College

The below is from an ACTEC Press Release dated March 31, 2021: The Board of Regents of the American College of Trust and Estate Counsel (ACTEC) convened during the College’s Virtual Annual Meeting to consider nominations for a new class of Fellows. The College is pleased to announce that 43 individuals were elected. The select group spans the US and includes seven international Fellows representing Buenos Aires, Argentina; Hamilton, Bermuda; London, England; Paris, France; Vaduz, Liechtenstein; Caracas, Venezuela; and Zurich, Switzerland; as well as two Academic Fellows. To qualify for membership, a lawyer must have no fewer than ten years’ experience in the active practice of trust and estate law, as fiduciary counsel with a fiduciary services company, or a combination thereof, or be a full-time teacher of law at a duly accredited law school with a specialty of teaching T & E law and have at least ten years' cumulative experience as a lawyer in active private T & E practice or as a teacher of T & E law, or a combination thereof. Lawyers and law professors are elected to be Fellows based on their outstanding reputation, exceptional skill and substantial contributions to the field by lecturing, writing, teaching and participating in bar leadership or legislative activities. It is their intention to improve and reform probate, trust and tax laws, procedures and professional responsibility. “I am pleased to congratulate and welcome our outstanding new class of ACTEC Fellows from around the world,” said ACTEC President Ann B. Burns. “I look forward to working with this expansive group of professionals whose exceptional abilities and commitment to the field of trusts and estates will help enhance and further key objectives of the College.”  ACTEC New Fellows ·        Jerome Assouline of Sekri Valentin Zerrouk, Paris, France ·        Robert Barton, Esq. of Holland & Knight LLP, Los Angeles, CA ·        Alberto I. Benshimol Bello of D'Empaire, Caracas, Venezuela ·        Julie A. Berkowitz, Esq. of the Law Office of Julie Berkowitz, Saint Louis, MO ·        Darren  T. Case, Esq. of Tiffany & Bosco, P.A., Phoenix, AZ ·        Toby M. Eisenberg, Esq. of Lindquist Eisenberg LLP, Plano, TX ·        Josie M. Faix, Esq. of Balson Faix & McVey LLP, Centennial, CO ·        Matthew M. Farley, Esq. of Armstrong Bristow Farley & Schwarzschild PLC, Richmond, VA ·        John R. Fitzpatrick, Esq. of Frazer, Ryan, Goldberg & Arnold, L.L.P, Phoenix, AZ ·        Jessica Lynn Foss, Esq. of Fredrikson & Byron, P.A., Fargo, ND ·        Johannes Gasser of Gasser Partners Attorneys at Law, Vaduz, Liechtenstein ·        Jennifer DiVeterano Gayle, Esq. of Mannion Prior, LLP, King Of Prussia, PA ·        Elizabeth R. Glasgow, Esq. of McDermott Will & Emery LLP, Los Angeles, CA ·        Chasity Grice of Peppel, Grice & Palazzolo, P.C., Memphis, TN ·        Kristen Frances Hager, Esq. of McGuireWoods LLP, Richmond, VA ·        Loretta A. Ippolito, Esq. of Paul, Weiss, Rifkind, Wharton & Garrison, New York, NY ·        Emily B. Kile, Esq. of Kile & Kupiszerski Law Firm LLC, Scottsdale, AZ ·        Dennis I. Leonard, Esq. of Ramsbacher Prokey LLP, San Jose, CA ·        Renat V. Lumpau, Esq. of Choate, Hall & Stewart LLP, Boston, MA ·        Craig MacIntyre of Conyers Dill & Pearman, Hamilton, Bermuda ·        Nicolas Malumian of Malumian & Associates, Buenos Aires, Argentina ·        Steven Frank Mattoon, Esq. of Matzke, Mattoon, Martens & Stromen, L.L.C., Sidney, NE ·        Samantha Rayburn Moore, Esq. of Butler Snow LLP, Ridgeland, MS ·        Stephen W. Murphy, Esq. of McGuireWoods LLP, Charlottesville, VA ·        William G. Newsome III, Esq. of Newsome Law, P.A., Columbia, SC ·        J. Steve Nys, Esq. of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, MN ·        Maureen L. O'Leary, Esq. of O’Leary-Guth Law Office, S.C., Thiensville, WI ·        Pamela Epp Olsen, Esq. of Pamela Epp Olsen Law, PC, LLO, Scottsbluff, NE ·        Louisa M. Ritsick, Esq. of Bryant Ritsick Symons & Ratner LLC, Denver, CO ·        Jenna G. Rubin, Esq. of Gutter Chaves Josepher Rubin Forman Fleisher Miller P.A., Boca Raton, FL ·        Toni M. Sandin, Esq. of Sandin Law, Ltd., Fargo, ND ·        Victor J. Schultz, Esq. of Prairie Trust, Waukesha, WI ·        Lisa A. Shearman, Esq. of Hamburg, Rubin, Mullin, Maxwell & Lupin, P.C, Lansdale, PA ·        Alfred J. Stashis Jr., Esq. of Dunwody White & Landon, P.A., Naples, FL ·        David E. Stutzman, Esq. of Seward & Kissel LLP, New York, NY ·        Professor Phyllis Taite of Florida A&M University College of Law, Orlando, FL ·        Mary E. Vandenack, Esq. of Vandenack Weaver LLC, Omaha, NE ·        Christine S. Wakeman, Esq. of Winstead P.C., Dallas, TX ·        Emma-Jane Weider of Maurice Turnor Gardner LLP, London, England ·        Professor Reid Kress Weisbord of Rutgers Law School, Newark, NJ ·        Kinga Maria Weiss of Walder Wyss, Zurich, Switzerland ·        Edward V. Wilcenski, Esq. of Wilcenski & Pleat PLLC, Clifton Park, NY ·        Andrew Zabronsky, Esq. of Hartog I Baer I Hand, Orinda, CA About the American College of Trust and Estate Counsel (ACTEC): Established in 1949, The American College of Trust and Estate Counsel (ACTEC) is a national, nonprofit association of approximately 2,500 lawyers and law professors from throughout the United States and abroad. ACTEC members (Fellows) are peer-elected on the basis of professional reputation and expertise in the preparation of wills and trusts, estate planning, probate, trust administration and related practice areas. The College’s mission includes the improvement and reform of probate, trust and tax laws and procedures and professional practice standards. ACTEC frequently offers technical comments with regard to legislation and regulations but does not take positions on matters of policy or political objectives.

VANESSA BRYANT PLEASE JUDGE, CANCEL MY MOM ... Her Claims For Lifetime Support Are Bogus

Vanessa Bryant's mother, Sofia Laine, filed a lawsuit against Kobe's estate alleging that Kobe Bryant promised to take care of her financially for the rest of her life. 

Vanessa Bryant asked the judge to dismiss her mother's claim, alleging that her mother's claims are "bogus." 

Vanessa Bryant used previous documents to shed light on a legal fight her mother had with her ex-husband in 2004 and 2008 over spousal support. Sofia's ex-husband claimed that he should not have to pay her because Kobe and Vanessa were supporting here. Sofia rebutted by saying that Kobe and Vanessa had no obligation to support her and anything they provided for her was "simply out of the goodness of their hearts." 

Vanessa Bryant also claims that even if Kobe had made the oral promise to Sofia, its too vague to be enforced. 

Sofia has also claimed that Vanessa and Kobe violated California labor laws by not giving her "meal breaks, rest periods, and giving her minimum wage for babysitting services." Vanessa rebutted these claims by saying Sofia was never an employee but is instead a grandmother who helped Kobe and Vanessa by spending time with her grandchildren. 

Vanessa Bryant's legal team has also stated that Sofia did not file a creditor's claim within a year of Kobe's death so she cannot go after Kobe's estate. 

The judge has not made a ruling yet. 

See VANESSA BRYANT PLEASE JUDGE, CANCEL MY MOM ... Her Claims For Lifetime Support Are Bogus, TMZ, March 29, 2021. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

Twitter CEO Jack Dorsey's first tweet sold for $2.9 million on Sunday. The buyer said it's the Mona Lisa of tweets.

An NFT version of Twitter CEO Jack Dorsey's first tweet sold at auction for $2.9 million. The buyer said he's valuing it like "fine art."

Hakan Estavi, chief executive at Bridge Oracle, claimed "[t]his is not just a tweet. . .I think years later people will realize the true value of this tweet, like the Mona Lisa painting." 

Dorsey's tweet—"just setting up my twttr"—was just 24 characters, which means Estavi paid more than $100,000 per character. 

This is a stark price, even in the form of an NFT. According to Tom C.W. Lin, a professor at Temple University's Beasley School of Law, "[a]n NFTs value is largely derived as a function of scarcity and speculation."

Basically, the price comes from "the combination of high demand and rarity. . ." 

The demand for Dorsey's tweet has had a slow and gradual incline. The first offer was for one dollar on December 15. After a few weeks, the offer rose to $3500, but was eventually cancelled by the bidder. 

 Dorsey plans to convert the proceeds to bitcoin and then donate it to charity. 

See Kevin Shalvey, Twitter CEO Jack Dorsey's first tweet sold for $2.9 million on Sunday. The buyer said it's the Mona Lisa of tweets., Business Insider, March 24, 2021. 

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

Ancient Egyptian manual reveals new details about mummification

Egyptologist Sofie Schiødt of the University of Copenhagan was able to reconstruct the embalming process used to prepare ancient Egyptians using a manual discovered in a 3,500-year-old papyrus. The manual used by Schiødt is the oldest surviving manual on mummification that has been discovered. 

Embalming was considered a sacred art in ancient Egypt and only few people knew the process. It is likely that embalming secrets were shared orally, which Egyptologists believe may be the reason why written evidence is miniscule. 

Sofie Schiødt shared an edited version of the manual, below is a construction of the embalming process: 

The embalming, which was performed in a purpose-built workshop erected near the grave, took place over 70 days that were divided into two main periods – a 35-day drying period and a 35-day wrapping period.

During the drying period, the body was treated with dry natron both inside and outside. The natron treatment began on the fourth day of embalming after the purification of the body, the removal of the organs and the brain, and the collapsing of the eyes.

The second 35-day period was dedicated to the encasing of the deceased in bandages and aromatic substances. The embalming of the face described in the Papyrus Louvre-Carlsberg belonged to this period.

The entire 70-day embalming process was divided into intervals of 4 days, with the mummy being finished on day 68 and then placed in the coffin, after which the final days were spent on ritual activities allowing the deceased to live on in the afterlife.

See Ancient Egyptian manual reveals new details about mummification, University of Copenhagan: Faculty of Humanities, February 26, 2021. 

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

Can you catch COVID from a corpse? It’s possible, but experts say not to worry

Experts have had their hands full in dealing with the COVID-19 pandemic and its contagious, and deadly nature. 

Of course, it did not take experts long to learn that the virus could be easily spread among living people. However, one question that remains is how long the virus can live in the body after a person has died. Experts have said it could live in the body for several days. 

According to Dr. Prakash Shrestha, an infections disease physician with Covenant Health said, “[i]f somebody were to go and touch, hug or kiss a dead corpse [of someone who died of the coronavirus], then yes, there is a chance that they might catch the virus from contact.”

However, Dr. Shrestha said there is no need to worry because the chance of this kind of infection happening is low. 

It is actually the "last responders" that are the most at risk for this type of infection. Examples of these last responders are forensic pathologists and funeral directors. 

Mike Box, an Associate Funeral Attendant for Krestridge Funeral Home in Levelland, TX, stated, “Those droplets [from those who’ve died of COVID-19] can still come out of their mouth and nose and form a vapor that you can be exposed to.”

Due to the danger of contracting the virus from corpses, funeral workers have had to take extra precautions when handling the dead bodies of those that have died from the virus. The danger is much more prevalent in open-casket funerals for virus patients, especially because family members may not know the potential risk. 

Dr. Shrestha said that the greatest risk at a funeral is actually the potential for the virus to spread among the living. So, there is not much to worry about in regard to contracting the virus from a corpse, but people coming in contact with the living—and the dead—should be extra cautious. 

See Can you catch COVID from a corpse? It’s possible, but experts say not to worry, Everything Lubbock, March 25, 2021.

The Art of Estate Planning

Many people may not consider what to do with their art collection when they are creating their estate plan. However, an art collection can "represent a significant portion of your estate." Therefore, it is critical that you include your art in your estate plan. 

You may want to consider how much your art is worth as well as how it will be handled after your death. 

In considering how much your collection is worth, you should have it appraised periodically by a professional. This is one of the most important steps. Although the frequency of appraisals will vary based on what type of art you collect, it is recommended that you get an appraisal at least every three years, if not annually. 

Obtaining appraisals regularly will allow you to keep track of how your collection is growing in value and will all you to "anticipate tax consequences down the road." 

There are three main options that you have in dealing with your art collection in your estate plan. You can sell it, bequest it to your loved ones, or donate it to a museum or charity. 

The best option for one may not be the best option for another, so it is advisable that you seek out help from an estate planning advisor to help you decide which is the best strategy for you. 

See David T. Riedel, The Art of Estate Planning, Adler, Pollock, & Sheehan P.C.: Insight in Estate Planning, March 24, 2021. 

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

Legislation Introduced to Repeal Federal Estate Tax

Legislation has been introduced by lawmakers that would repeal the federal estate tax, also known known as the death tax. 

The proposed legislation is called the Death Tax Repeal Act of 2021 and currently has the support of close to 150 lawmakers in both houses of Congress. 

According to Zippy Duvall, President of American Farm Bureau Federation (AFBF), “Farmers and ranchers already face unpredictable challenges beyond our control yet persevere to protect our nation’s supply of food, fiber and renewable fuel. The tax code should encourage farm business growth, not add to uncertainty.”

Duvall also stated, “[e]liminating the estate tax removes another barrier to entry for sons and daughters or other beginning farmers to carry-on our agricultural legacy and make farming more accessible to all.”

Through research and analysis, the AFBF has found that federal estate taxes threaten more than 74,000 farms around the nation. Due to the increase in the transition of farmland that is projected to occur over the next 20 years, ag groups are "concerned about how estate taxes are going to impact the future of the farm economy," and for good reason. 

The Death Tax Repeal Act of 2021 could remove limitations on farmlands and would almost definitely create some comfort for ag groups. 

See Brian German, Legislation Introduced to Repeal Federal Estate Tax, Ag Net West, March 15 2021. 

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

This UT Student Startup Is Bringing Estate Planning Into the Digital Age

The Launch Pad at the University of Texas at Austin helps students "in the various stages of entrepreneurship navigate innovation across the Forty Acres." Apoorva Chintala has been particularly successful in the LaunchPad program. Chintala is a junior at UT and is pursuing degrees in management information systems, economics, and Plan II. 

Chintala is the CEO and co-founder of Clock Inc., "an online platform for effortless and legal digital estate planning." This month, Chintala was selected as a finalist for the Spring 2021 LaunchPad Fellowship. 

Chintala has taken notice of the current gaps in estate planning, especially the gaps caused by the trouble to keep up with the ever-evolving digital world. Chintala began catching on to these issues when her grandfather died her sophomore year of high school. 

"Since then, Clocr has been growing and recently pivoted to become the only solution for digital estate planning in the world that is compliant with the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)." 

Compliance with the RUFADAA is vital because it ensures that you and your loved ones safe from identity theft, privacy law violations, loss of money and time, and more. 

Chintala said, “My grandfather passed away, and my dad is the eldest of his siblings. He had to fly to India, where the majority of my family lives, to sort through boxes and boxes of loose documents. Having to deal with guessing what my grandfather’s wishes were while also processing his death was a lot to deal with emotionally.”

It appears that the business world has caught on to the need for a more digital-ready form of estate planning. Clock has won or placed in 12 entrepreneurship competitions in this past year alone. 

It will be interesting, and exciting, to see how Clocr evolves and how it impacts estate planning as we know it.

See Barrett Ward, This UT Student Startup Is Bringing Estate Planning Into the Digital Age, UT News: Business & Economy, March 24, 2021. 

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

Spain passes law allowing euthanasia

Spain recently passed a law that will legalize euthanasia. Spain is the fourth country in Europe to allow people to end their own life in some circumstances. 

The law was just recently approved by Spain's lower house of parliament. The House of Parliament had support from centre and left-wing parties. 

The law is expected to take effect and June and allows "adults with 'serious and incurable' diseases that cause 'unbearable suffering' to choose to end their lives." 

Prior to this new law, a person could be sentenced to jail for up to 10 years for assisted suicide. 

While right-to-die campaigners were happy about the new law, conservatives and religious groups are not happy. 

As of now, Belgium, Lexumbour, the Netherlands, Canada, and Colombia are the only other countries that have legalized euthanasia. 

See Spain passes law allowing euthanasia, BBC, March 18, 2021. 

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.