Wills, Trusts & Estates Prof Blog

Article: Alkaline Hydrolysis

Victoria J. Haneman recently published an article entitled, Alkaline Hydrolysis, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

Hollywood has developed its own villainous death disposition trope that is often a link in a nefarious narrative chain—disposition of human remains through some form of chemical dissolution. Spanning decades and genre, popular cinema and television television have warmly embraced liquification of the dead, including but not limited to The Wizard of Oz, House on Haunted Hill, Thief, Who Framed Roger Rabbit, Point of No Return, Palmetto, Walker, Texas Ranger, NCIS, Bones, The Wire, Breaking Bad, Dexter, Blacklist, Homeland, Elementary, 10 Cloverfield Lane, Ozark, Rick and Morty. The specifics vary dramatically from one work of fiction to the next but the common thread of the trope is the immutability of the erasure. Although the storyline typically ambles onward, the decedent is eliminated in a way that leaves no trace.

Although incineration-based cremation is more environmentally friendly than traditional burial, it falls short of being ideal because of the energy required and air emissions produced. Alkaline hydrolysis or liquid cremation is a clean, green alternative to fire-based cremation, using only 10% of the energy and producing no air emissions. It is a process that essentially liquifies a corpse, leaving behind bones that can be ground to produce ash and returned to loved ones. Alkaline hydrolysis is legal for commercial use in twenty states as of 2020. The purpose of this Essay is to consider the way in which the law is being leveraged to obstruct this innovative death technology from being more broadly available to consumers.

Article: Protecting the Personal Rep

In Protecting the Personal Rep, Seymour Goldberg, senior partner at Goldberg & Goldberg, explains steps that can be taken to protect the personal representative of IRA trusts.

Goldberg explains that, "[s]uch precautions may be useful if there is likely to be a large IRA and a substantial estate tax liability, but insufficient probate assets for paying estate tax." 

If this is the case, the personal representative "could be responsible for paying federal/state estate tax to the extent of probate assets." Goldberg went on to say, “If the personal representative has knowledge of unpaid estate tax but distributes money to creditors instead of the IRS, rendering the estate unable to pay the estate tax, the IRS can hold the personal representative personally liable for unpaid tax. . .”

According to Goldberg, one possible solution would be to name a short-term trust (terminating 5 years after the IRA owner dies) as IRA beneficiary. 

For more information and tips, See Seymour Goldberg, Protecting the Personal Rep, Ed Slott's IRA Advisor (January 2022). 

Article: IRA Trusts Should Be Irrevocable

In IRA Trusts Should Be Irrevocable, Seymour Goldberg explains why IRA trusts should be irrevocable, especially in jurisdictions that have adopted versions of the Uniform Trust Code (UTC).

IRA owners with large accounts may name an IRA trust as the beneficiary of their IRA accounts for estate planning and asset protection advantages. However, naming an revocable trust as the IRA beneficiary could pose potential dangers. 

In Commerce Bank N.A. v. Bolander, a Kansas Appeals court ruled that an IRA owner's accounts that were payable to a revocable trust "were vulnerable to creditors of the deceased IRA owner if the probate estate assets were inadequate to satisfy valid claims." 

For this reason—and others—it is worthwhile to make IRA trusts irrevocable in order to place a safeguard from creditors. 

See Seymour Goldberg, IRA Trusts Should Be Irrevocable, Ed Slott's IRA Advisor (February 2022). 

Article: ‘By fraud and collusion’: Feudal Revenue and Enforcement of the Statute of Marlborough, 1267-1526

Ashley Hannay recently published an article entitled, ‘By fraud and collusion’: Feudal Revenue and Enforcement of the Statute of Marlborough, 1267-1526, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

Following the Statute of Marlborough, 1267, feoffments which were designed to deprive lords of wardship could in some circumstances be deemed ‘collusive’ or ‘fraudulent’. This was further complicated from the mid fourteenth century onwards by the common practice of creating uses to circumvent the common law rules prohibiting the devise of land by last will. The effect of uses being created to perform last wills was that lords, in particular the king, were losing out on their feudal incidents. The current view, put forward by legal historians, is that the crown struggled to enforce the Statute of Marlborough after 1410, and that the ‘campaign’ against this loss of feudal revenue began in the 1520s. This paper seeks to re-examine this view, particularly in relation to how Marlborough and collusion were understood and the crown’s approach to the avoidance of feudal incidents in the reign of King Henry VII.

The Daily: Documenting a Death by Euthanasia

Champion Paralympic athlete from Belgium, Marieke Vervoort, who had a progressive disease, announced her retirement from professional sports in 2016, and also spoke of her desire to undergo euthanasia. 

In a podcast by The Daily , Vervoort's story is told by Lynsey Addario, a photojournalist who documented the end of Vervoort's life. 

Lynsey had this to say, "In most of my experiences covering Iraq and Afghanistan and Democratic Republic of Congo and Darfur, I'm photographing people who are trying not to die. . .Marieke was the first person I had really met who wanted to die. " 

You can listen to the podcast here. 

 

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

 

Article: The Internal Point of View in Private Law

Jeffrey A. Pojanowski and Paul B. Miller recently published an article entitled, The Internal Point of View in Private Law, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

Many leading private law theorists claim to analyze private law from an internal point of view; a vantage point within which private law doctrine, institutions and procedure enjoy pride of place. Private law theory of a generation ago distinguished the internal from external points of view, valorizing the former and criticizing the latter for ignoring the normativity of private law or for mistaking private law for public law or regulation. The New Private Law, by contrast, asserts the complementarity of internal and external points of view, partly by emphasizing the value of functionalist analyses of legal form. In this article, we canvas leading accounts of the internal point of view in private law (provided by corrective justice and civil recourse theorists, respectively) and identify their shortcomings: notably, their inability to ground assertions about the normative and explanatory priority of the internal point of view, and about its relationship (whether of exclusivity or complementarity) to external points of view. We offer an alternative, and we think better, rendering of the internal point of view, drawing on the work of John Finnis. Amongst other things, our account vindicates the New Private Law’s alluring but elusive promise of perspectival integration, showing how private law may be understood as an interlocking set of practices of public practical deliberation equally concerned with reasoned compliance and behavioral conformity with practically reasonable laws.

 

Client Quick-Hit Alert -- New Year, New Estate & Gift Tax Exemptions

New year = new Estate & Gift Tax exemptions and new estate planning opportunities. For example: 

 

• The federal gift & estate tax exemption has increased from $11.7 million in 2021 to $12.06 million in 2022.
• The New York State estate tax exemption has increased from $5.93 million in 2021 to $6.11 million in 2022.
• The Connecticut state gift & estate tax exemption has increased from $7.1 million in 2021 to $9.1 million in 2022.

As of now, the next big shift in the federal estate & gift tax exemption will be at the end of 2025. At that point, the previously enacted tax cuts are scheduled to expire, resetting the federal gift & estate tax exemption of approximately $5.5 million. 

However, proposed tax laws could decrease the exemption to a lower amount before the scheduled expiration date. 

These new increased exemptions provide tremendous opportunities through the use of effective and efficient estate planning gift strategies such as:

• Dynasty Trusts, which provide generations of protection from creditors' claims, divorce claims, and future federal estate taxes and state estate taxes
• SLATs (Spousal Lifetime Access Trusts), which protect assets from future estate taxes while retaining those assets for use in your generation before such assets pass to children and grandchildren
• GRATs (Grantor Retained Annuity Trusts), which allow gift tax free transfers of assets to the next generation
• ILITs (Irrevocable Life Insurance Trusts), which protect life insurance proceeds from federal estate taxes and state estate taxes
• CLATs (Charitable Lead Annuity Trusts), which provide for both a charitable income tax deduction and a gift tax efficient transfer of assets to the next generation.

See Client Quick-Hit Alert -- New Year, New Estate & Gift Tax Exemptions, Dentons, January 21, 2022. 

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

Article: Out of Wedlock, Out of Luck; What Happened to Andrew Vanstone’s Estate in Wilkie Collins’s No Name

Leslie Katz recently published an article entitled, Out of Wedlock, Out of Luck; What Happened to Andrew Vanstone’s Estate in Wilkie Collins’s No Name, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:

 

The paper gives the legal reasons for the heroine's wicked uncle's becoming the owner of all of her late father's property instead of her and her sister.

Prof. Brant Hellwig to lead Graduate Tax Program at NYU

Prof. Brant Hellwig, formerly with Washington & Lee, joined NYU Law on January 1, 2022 as a "professor of tax law and as the new faculty director of the Graduate Tax Program." See Brant Hellwig LLM ’00 to lead Graduate Tax Program, NYU Law News (Oct. 4, 2021).

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this article to my attention.

Intentionally Defective Grantor Trust: Income Tax Issues

With an Intentionally Defective Grantor Trust (IDGT) the settlor removes assets from the settlor's estate and moves them into the IDGT while retaining the income tax liability for the income generated by those assets. 

An IDGT "can be beneficial for transferring wealth and reducing estate taxes." By retaining "grantor powers," the settlor is treated as the owner of the trust assets for income tax purposes and is taxed as if the settlor received the trust income directly. 

These trusts are referred to as "'intentionally defective' because the settlor relinquishes ownership of the assets for estate tax purposes but remains the owner of the trust for income tax purposes." 

The primary benefit of the grantor trust status is that the trust assets can continue to appreciate without being depleted by income tax payments, which amounts to an additional transfer of wealth to the trust beneficiaries that is not subject to transfer tax (Rev. Ruling 2004-64). 

See Intentionally Defective Grantor Trust: Income Tax Issues, Wendel Rosen LLP, October 15, 2021. 

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