Wills, Trusts & Estates Prof Blog

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

Wednesday, May 26, 2021

If You Plan to Visit Aging Parents, Bring a To-Do List

Estate planningThe pandemic affected a lot of families as many people were kept away from their senior parents.

Since the vaccine was introduced, we have seen more and more things opening up and people are able to go out and see their families. 

As Covid-19 continues to linger, it is important that you still take precautions when visiting your family members, especially your aging parents. 

Many aging parents have not been able to get things done outside of the house and in some cases, inside of their home. With that in mind, it's a good idea to make a to-do list with tasks you can do to help out your parents. 

Whether it be going grocery shopping or making repairs around the house, making your visit with your aging parents productive is a great way to make up for lost time. 

Before you arrive you can ask your parents if they need anything or if anything around the home needs attention. They may possibly need food or other supplies. 

Family reunions are becoming more realistic as time passes, so it is important to consider the ways you can help your aging family members before you reunite with them. 

See Julie Weed, If You Plan to Visit Aging Parents, Bring a To-Do List, N.Y. Times, May 23, 2021. 

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

May 26, 2021 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Monday, May 24, 2021

Democrats Mull Weakening Biden Tax On Capital Gains For Estates

Wealth taxThe Biden administration's proposal to "dramatically expand the inheritance tax bill for wealthy Americans" is beginning to frequent obstacles as Democrats on Capitol Hill are becoming nervousness about the "scope and size of elements of the White House's ambitious plans." 

One of the key elements of the Biden Administration's proposal is ending the step-up in basis, which allows heirs to use the market value of assets at the time of inheritance (as opposed to the purchase price) as the cost basis for capital gains. 

According to those in the loop, "[i]nstead of hitting heirs with a hefty tax payment at the time of the death of their benefactor, staff for House Ways and Means Chair Richard Neal have floated allowing the beneficiaries to defer the bill as long as they hang on to the asset. . ." 

The "Green Book," which is a report from the Treasury Department, is expected to provide some detail on the Biden Administration's tax plans.

See Laura Davison & Nancy Cook, Democrats Mull Weakening Biden Tax On Capital Gains For Estates

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

May 24, 2021 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation | Permalink | Comments (0)

Article: Models of Electronic-Will Legislation

Adam J. Hirsch recently published an article entitled, Models of Electronic-Will Legislation, Wills, Trusts, & Estates Law ejouranl (2021). Provided below is the abstract to the Article: Estate planning

This Article examines alternative ways lawmakers could structure legislation validating electronic wills. The Article identifies four essential models, each of which is currently reflected in acts or drafts of acts found either in the United States or abroad. These are: (1) acts validating electronic wills that meet formal requirements, (2) acts giving effect only to specialized variants of electronic wills (or none at all), (3) acts allowing electronic wills only when made under emergency conditions, and (4) acts allowing electronic records intended as wills on a case-by-case basis, without establishing formalities for their validation. In the course of the analysis, the Article performs the first-ever empirical survey of popular assumptions concerning the revocation of electronic wills. The Article ultimately concludes that, given the novelty of electronic wills, we are best off if states experiment with alternative legislative models until lawmakers have enough evidence to assess their relative merits. For this reason, the Uniform Electronic Wills Act of 2019 is premature.

May 24, 2021 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Saturday, May 22, 2021

ACTEC Shares Useful Resources

ACTECThis month The American College of Trust and Estate Counsel, ACTEC, shared the following resources that may be of interest to you. 

ACTEC Trust and Estate Talk (for professionals)

An Update of Qualified Opportunity Funds and Zones - A summary for investors and trust and estate planners regarding the IRS guidance regarding qualified opportunity funds and zones and IRS Notice 2021-10.

Legislative Comments

ACTEC Submits a Report with Recommendations to Revise IRC Section 6166 - ACTEC is pleased to submit this recommendation to substantially revise IRC Section 6166 and to propose the enactment of a new IRC Section 6166A to address the important issues related to providing deferral treatment for federal estate tax and generation-skipping transfer tax attributable to closely held business interests. As Congress considers legislative proposals related to the transfer tax system, the enclosed Report provides analysis regarding changes that, in the opinion of ACTEC, would improve the administration of the estate tax deferral regime and provide a new deferral opportunity with respect to generation-skipping transfer taxes.

ACTEC’s comments and recommendations are set forth in the Report, which is the product of nearly a decade of research and analysis on this topic. 

May 22, 2021 in Estate Planning - Generally | Permalink | Comments (0)

Thursday, May 20, 2021

Article: Six Differences between Trustees and Company Directors

Mark Leeming recently published an article entitled, Six Differences between Trustees and Company Directors, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: 

This note identifies six differences between trustees and company directors: the absence of a separate legal personality of the trust, the different rights of creditors, the different obligations owed, different rights to information, different powers of removal and, especially, the different requirement of unanimity when decisions are made.

May 20, 2021 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Wednesday, May 19, 2021

Adding Insult to Death

Thomas E. Rutledge recently published an article entitled, Adding Insult to Death, Business Lawyer (Spring 2021). Provided below is the abstract to the Article: 

Death is the one eventuality for which all individuals must account. Even as limited liability companies (“LLCs”) are now the most commonly used form for new business organizations, most participants therein fail to appreciate that absent express agreement set forth in the op-erating agreement, upon death their heirs do not succeed to any rights to participate in man-agement even as those heirs seldom have an opportunity to liquidate the investment. This article will review the default treatment under the various LLC acts and explore a variety of approaches that may be taken in an operating agreement to alter the default treatment.

May 19, 2021 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, May 18, 2021

Michael Jackson Estate Scores Big Tax Court Victory

MJIn Estate of Jackson v. Comm'r, T.C. Memo. 2021-48, "the Tax Court held that the value of the image and likeness of Michael Jackson was $4,153,912, as opposed to the $161,307,045 asserted by the IRS in court, and as compared to the IRS’s original position during audit that the likeness and image of Jackson was worth $434,264,000."

The subject of the proceedings was focused primarily on the likeness and image of Michael Jackson, as opposed to all of his intangible estate property.

Under California's codified Right of Publicity (ROP) Law, "any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods. . .without prior consent from the person or persons, shall be liable for any damages sustained by the person or persons injured as a result thereof." 

The Tax Court held that Image and Likeness is included in the Gross Estate. 

The Estate's appraisal expert estimated a value of $161 million for the ROP, but the Tax Court rejected the opinion, stating that the expert conflated the ROP with the Estate's copyright assets. 

The Tax Court also stated that Jackson's personal life reduced the value of his ROP, based on moral and legal issues "clouding Jackson's reputation." 

See Michael Jackson Estate Scores Big Tax Court Victory, Probate Stars, May 16, 2021. 

May 18, 2021 in Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Article: IRS Guidance About the SECURE Act's Beneficiary Provisions Requires Revision

Albert Feuer recently published an article entitled,  IRS Guidance About the SECURE Act's Beneficiary Provisions Requires Revision, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article. Estate planning

The IRS has presented its first and only guidance about how the SECURE Act changed the Minimum Required Distribution (MRD) Rules. This was done in a detailed IRS guide for preparing 2020 returns, and an IRS FAQ web site that referenced the guide that had been released a day earlier. The SECURE Act limited the set of individual beneficiaries permitted to use their own life expectancy to stretch out the benefit distributions after the death of participant. Non-favored individual beneficiaries became subject to a 10-year rule similar to the 5-year rule upon which it is based. The 5-year rule does not require any benefit distributions before the end of the 5-year period, but requires distribution on or before the final day of the period. The 5-year rule is applicable to an estate or trust not treated as a pass-through entity when the participant died before attaining the participant’s required beginning date.

The IRS correctly treats the 10-year rule as replacing a disfavored individual beneficiary’s ability to use the beneficiary’s life expectancy to determine annual MRDS. The return guidance incorrectly describes the 10-year rule as requiring annual distributions in each year following the participant’s death even though the 5-year rule has no such requirement. Furthermore, when the participant dies after attaining the participant’s required beginning date, the IRS guidance prevents a disfavored individual beneficiary from continuing to use the participant’s life expectancy to determine annual minimum required distributions. The IRS does this even though such continuation would result in no further stretch-out of the benefit distributions, and an estate or trust not treated as a pass-through entity may so use the participant’s life expectancy. These limitations are not consistent with the stated purpose of the SECURE Act MRD provisions, the long-standing IRS regulations interpreting the MRD rules, or the amended MRD statute as a whole. Moreover, they may be readily avoided by well-advised participants.

May 18, 2021 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Monday, May 17, 2021

Article: Inheritance Law in Tanzania: The Impoverishment of Widows and Daughters

Tamar Ezer recently published an article entitled, Inheritance Law in Tanzania: The Impoverishment of Widows and Daughters, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

Tanzania’s inheritance laws are in urgent need of reform. Both customary and Islamic law, the two predominant systems of intestate succession in Tanzania, limit women’s inheritance on the basis of their gender. Under customary law, a widow is generally denied inheritance altogether: “[H]er share is to be cared for by her children, just as she cared for them.” Daughters inherit the smallest share with attached restrictions, and under governing Islamic law, women only inherit half as much as men. Tanzania’s inheritance laws thus impoverish women and leave their survival at the mercy of men. The effect of these discriminatory laws is further magnified by procedural inequalities, exploitative practices, and the spread of AIDS. Procedural laws favor the selection of male administrators, even if they are distant relatives of the deceased, thus excluding women from the management of estates. Women also have to contend with widespread property grabbing, eviction from their homes under witchcraft accusations, and sometimes even the loss of their children by abusive relatives. Women in polygamous families have to further split any meager inheritance they do receive. Suffering is especially severe in light of the AIDS pandemic, which has increased the number and vulnerability of widows and orphans. The extent of this crisis is evident in the numerous Tanzanians seeking assistance for inheritance-related problems.

 

May 17, 2021 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Saturday, May 15, 2021

ACTEC Shares Useful Resources

This week The American College of Trust and Estate Counsel, ACTEC, shared the following resources that may be of interest to you. 

ACTEC Trust and Estate Talk (for professionals)

Defined Value Purchase Agreements - Advice to help your business clients transfer their business interests using a defined purchase agreement. 

Special Needs Trusts, Special Needs Planning and Guardianship (for clients)

The ACTEC Family Estate Planning Guide has created a new resource webpage for families and caregivers. Special Needs Trusts, Special Needs Planning and Guardianship offer information regarding Special Needs Trusts, Alternatives to Guardianship, Supported Decision-Making and more. Please consider it as a valuable resource for clients.

ACTEC Family Estate Planning Guide (for clients)

Alternatives to Guardianship - What is guardianship, also known as conservatorship, and what are the alternatives to guardianship? Learn about alternatives to guardianship, including revocable trusts, POA, medical orders and social security options from experts.   

Planning for a Diverse and Equitable Future (for professionals)

The Importance of Cultural Competence in Estate Planning  - Two ACTEC Fellows discuss the differences between cultural sensitivity and cultural competence from the viewpoint of Asian American attorneys and explain why these skills are essential elements of effective estate planning. They also provide practical guidance as to how attorneys may best address sensitive cultural topics with their clients. Learn more in this important video.

May 15, 2021 in Estate Planning - Generally | Permalink | Comments (0)