Wills, Trusts & Estates Prof Blog

Oregon ends residency rule for medically assisted suicide

In a settlement filed in the U.S. District Court in Portland, the Oregon Health and the Oregon Medical Board "agreed to stop enforcing the residency requirement and to ask Legislature to remove it from the law." 

The lawsuit challenged the constitutionality of the residency requirement for the law allowing terminally ill people to receive lethal medication. The lawsuit argued that the residency requirement violated the U.S. Constitution's Commerce Clause, "which gives Congress the right to regulate interstate commerce, and the Privileges and Immunities Clause, which forbids states from discriminating against citizens from other states in favor of its own citizens." Attorneys for Compassion & Choices also argued that the law is also unfounded because no other portion of their practice is affected by residency requirements. 

Advocates have stated that they will use the settlement to press other states with medically assisted suicide laws to also remove their residency requirements.

According to Kevin Diaz, an attorney with Compassion & Choices, the national advocacy group that sued over Oregon's requirement, "[t]his requirement was both discriminatory and profoundly unfair to dying patients at the most critical time of their life. . ."

On the other side, Laura Echevarria, who opposes such laws argues that a residency requirement is necessary to save Oregon from becoming the nation's "assisted suicide tourism capital."

According to attorneys at Compassion & Choices, the residency requirements create obstacles for patients and make their lives even more insufferable. This is especially true for patients in Washington who are seeking assistance in ending their lives. Although Washington has a similar law to Oregon's, it is much harder to find facilities willing to assist due to the large number of hospital beds that are in religiously affiliated health care facilities. 

According to Compassion & Choices, the hope is that people will be able to cross state lines in order to receive the help they are seeking, because they legal boundaries like a residency requirement should not cause them to suffer more than they already are. 

See Gene Johnson, Oregon ends residency rule for medically assisted suicide, Everything Lubbock, March 28, 2022. 

Article: Dynasty 529 Plans and Structural Inequality

Victoria J. Haneman recently published an article entitled, Dynasty 529 Plans and Structural Inequality, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article:

The tax advantages available through 529 accounts, such as the potential for perpetual tax-free growth, have been maximized by the wealth defense industry that operates to the advantage of high income and wealth families in the United States. This essay is more a thought piece than a polemic, with the goal of starting a conversation on an important issue not often discussed: a 2018 change to the 529 structure slipped into the Tax Cuts and Jobs Act (TCJA) has essentially turned 529 plans into a government-subsidized school voucher scheme for the wealthy. Through this change, the dynasty education trust has become an even more attractive umbrella under which multiple 529 accounts may be managed by an affluent family to pay not just for college but also all private school (K-12) on a tax-sheltered basis.

 

Article: Property Law and the Intestacy Entitlement

Desiree Hensley recently published an article entitled, Property Law and the Intestacy Entitlement, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article:

There is a wealth gap between whites and non-whites in the United States, in part because of the superior rights that whites have had to acquire property. Those who own real property are much more likely to accrue wealth than those who do not. This does not hold true if you own heirs property. Heirs property is a form of intergenerational tenancy in common ownership that is created when an owner of property dies without a will. The owner’s relatives become co-owners and then, when they die, their own heirs join the ownership group, which expands with every generation. Unlike other owners of real property, heirs property co-owners don’t have deeds or proof of ownership that they can use to protect their legal rights or to participate in the real estate market. African American, Appalachian, and Native American owners are disproportionately affected by this problem. It is estimated that in the United States there are millions of acres tangled up in this manner.

Using one’s interest in property is an excellent way to acquire wealth. Heirs property owners can’t acquire wealth in this way, however, because of how fragmented and uncertain their ownership is, effectively excluding them from the market. Property law generally supports real estate transactions by ensuring certainty and alienability, but it fails with respect to heirs property. Worse, it tolerates heirs property, allowing it to be created and then perpetuated.

This article offers a radical but philosophically consistent solution based on traditional property law rules and values. It calls on courts to utilize existing common law property rules, like the rule against perpetuities and the rule against restraints on alienation, to void heir property ownership interests that are too remote and to eliminate undeserving heirs from the heirs property ownership group. It calls on legislatures to make heirs property owners joint tenants with rights of survivorship by default, rather than as tenants in common. It also asks scholars to be more radical in offering creative solutions to this problem for the sake of those who can benefit most from its eradication.

Oscar nominees will receive gift bags worth nearly $140,000—but they could come with a hefty tax bill

The 94th Academy Awards this Sunday will host a slew of Hollywood A-listers hoping to walk out with an Oscar Statuette. 25 of the nominees will also receive a gift bag worth over $137,000. 

The gift bag is given to the five nominees in each of the four acting categories and nominees for "Best Director." The gift bag includes a collection of expensive items, including gold-infused olive oil and even up to $10,000 worth of plastic surgery. 

Unfortunately, if the gift bag is accepted by the nominees, they will also be accepting a "hefty tax burden." The tax must be applied because the gift bags are not technically "gifts" that were given "solely out of affection, respect or similar impulses for the recipients. . ." 

According to Eric Bronnenkant, head of Tax at Betterment, it comes down to intent. With the gift bag, the intent of providing these gift bags is to influence behavior and get celebrities to use a certain product or go on a specific vacation. 

Thus, the value of the gifts is calculated as income on the recipients' taxes. 

See Nicolas Vega, Oscar nominees will receive gift bags worth nearly $140,000—but they could come with a hefty tax bill, CNBC, March 27, 2022. 

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

When the Stepped-Up Basis of Inherited Property Is No More

Richard L. Kaplan recently published an article entitled, When the Stepped-Up Basis of Inherited Property Is No More, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article:

Written for a symposium on how Trusts & Estates might change in the future, this article considers the implications of repealing the “step-up in basis” rule for inherited property, as President Biden proposed. The article begins by explaining how this century-old tax rule affects gratuitous transfers and then reviews previous repeal efforts before it examines the impact of such repeal on family tax planning, retirement account funding, and charitable donations.

Article: Legal Age

Alexander A. Boni-Saenz recently published an article entitled, Legal Age, Wills, Trusts, & Estates Law ejournal (2022). Provided below is the abstract to the Article:

How old are you? This deceptively simple question has a clear answer in the law, which is a number measuring the amount of time that has elapsed since birth. However, as scientists discover various biomarkers of human aging and individuals openly embrace more fluid identities, this chronological definition will soon have to compete with biological and subjective alternatives. Legal scholars have previously examined the role of age in the legal system, but they have done so assuming a chronological definition. This is the first Article to examine critically the antecedent question of how we should define legal age after one has reached adulthood. The stakes for this definition are high. Age is ubiquitous in the legal landscape, appearing in the Constitution, antidiscrimination statutes, criminal laws, and public benefits programs. This Article normatively assesses the chronological, biological, and subjective conceptions of age, examining how well they improve the accuracy of the legal system, impact administrative costs, promote autonomy interests, and further antisubordination goals. It then charts three potential paths forward for legal age: abolishing age as a meaningful legal category for adults, particularizing the definition of legal age based on context, and reforming the chronological status quo through the calibration of existing age-based law.

When Her Husband Said He Wanted to Die, Amy Bloom Listened

On January 26, 2020, Amy Bloom and her husband, Brian Ameche, flew to Zurich for a life changing trip.

Bloom recalls being in the "Swissair pods" in business class on the flight with her husband and toasting their glasses. Bloom recalls toasting "Here's to you" instead of their usual "Cent'anni," which means "May we have a hundred years." 

In Bloom's first memoir, "In Love," which Random House will publish on March 8, Bloom writes, "[t]here is no 'Cent'anni' for us; we won't make it to our 13th wedding anniversary." 

Bloom and Ameche were not headed to Switzerland to celebrate. Instead, the couple headed to Dignitas, "a nonprofit organization in the suburbs of Zurich, where Ameche, 66, would legally, peacefully and painlessly end his own life." 

According to Bloom, Ameche, the accomplished architect and former Yale football player, had received a diagnosis of Alzheimer's disease in 2019, and did not wish for a "long goodbye." Bloom recalls Ameche stating, "I'd rather die on my feet than live on my knees." 

See Elisabeth Egan, When Her Husband Said He Wanted to Die, Amy Bloom Listened

, N.Y. Times, February 27, 2022. 

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

Article: When a Statute Comes with a User Manual: Reconciling Textualism and Uniform Acts

Gregory Elinson and Robert H. Sitkoff recently published an article entitled, When a Statute Comes with a User Manual: Reconciling Textualism and Uniform Acts, Wills, Trusts, & Estates Law ejournal (2022).

Provided below is the abstract to the Article: 

This Article develops an interpretive theory for statutes that originate as Uniform Acts promulgated by the Uniform Law Commission. Although overlooked in the literature on statutory interpretation, state-enacted Uniform Acts are ubiquitous. They shape our life cycles—governing birth, adoption, marriage, divorce, and death—and structure trillions of dollars in daily commercial transactions.

Largely focusing on textualism, today’s dominant form of statutory interpretation, we focus on the interpretive consequences of two unusual features of state-enacted Uniform Acts. First, the text of every Uniform Act directs courts to interpret it to “promote uniformity.” Second, each provision is ac-companied by an official explanatory comment, analogous to a user manual for interpreters. We argue that, in light of these features, foundational textualist principles obligate courts to consider legislative intent as expressed in the official comments—a form of what textualists would otherwise dismiss as legislative history—when they interpret a statute originating as a Uniform Act.

More specifically, the Article explores what we call the “directives” and “signals” that state legislatures send when they enact a Uniform Act. As en-acted statutory text, the promote-uniformity clause directs courts to treat the official comments as persuasive authorities on the statute’s meaning. Moreover, even if a legislature enacts only a portion of a Uniform Act, the legislature signals that courts should treat the comments as persuasive authorities by virtue of the choice to incorporate language from a Uniform Act rather than some alternative text.

Moving from theory to practice, we develop a canon of construction for interpreting this significant but understudied species of positive law. We also present a series of puzzles and complications arising from “hybrid” enactments of bespoke and Uniform statutory language. More generally, by colliding textualist theory with the two-step political economy of state-enacted Uniform Acts, the Article broadens our understanding of textualism and adapts it to this critical but overlooked category of statute.

Trusts as Eligible Shareholders of an S Corporation

It is a common estate planning practice for small business owners to transfer ownership of their business interests into their revocable living trusts. These transfers can be made during the business owner's lifetime or with a "transfer on death" (TOD) designation. 

This estate planning technique has many benefits, a major one being the avoidance of probate of the business interest at death, but only if the terms of the trust provide the necessary protections, AKA ensuring the trust is an eligible shareholder of an S corporation. 

The are certain factors to consider in these instances. So long as the business owner is living, "his or her revocable trust is treated as a 'grantor trust' for income tax purposes, and as such, is an eligible S corporation shareholder." Upon the death of the business owner, the trust will remain an eligible shareholder for a period of two years. After the two year period, the trust will be required to distribute stock outright to an eligible shareholder, unless the stock is to remain in the trust, in which case the trust must qualify as a qualified subchapter S trust (QSST) or an electing small business trust (ESBT). 

In order for the trust to qualify as a QSST, the trust "must require that all of the net income be distributed to a single beneficiary." To qualify as an ESBT, "the Trustee may have discretion to accumulate income, and there may be multiple beneficiaries."

For more information on the tax benefits of QSST and ESBT trusts: 

See Rebecca C. Bowen, Trusts as Eligible Shareholders of an S Corporation, Thompson McMullan P.C.: Commentary, March 17, 2022. 

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

Wendy and Jen Wreck the Movies – Uptown Girls (2003), Or Even Rock Stars Need Estate Planning

In very intriguing fashion, Wendy Hoey Sheinberg and Jennifer F. Hillman, also known as "Wendy and Jen" describe how modern day fairy tales are "excellent cautionary estate planning tales." 

Wendy and Jen "wrecked" popular movie Uptown Girls starring Brittany Murphy and Dakota Fanning by pointing out the consequences of the failure to create an estate plan. 

Uptown Girls tells the story of Princess Molly Gunn (played by Brittany Murphy) who fell into a fortune left by her parents. For awhile, she loved lavish, that was until her fortune was stolen by her business manager Bob. 

In Wendy and Jen's version of Uptown Girls, Princess Molly's parents decide to reach out to attorneys who just happen to be Wendy and Jen. Instead of leaving a heap of cash to their precious daughter Molly, they create and estate plan for their daughter. This estate planning fairy tale is much more practical, and far more safe as the treasure is protected from "wicked trolls" like Business Manager Bob. 

See Wendy Hoey Sheinberg & Jennifer F. Hillman, Wendy and Jen Wreck the Movies – Uptown Girls (2003), Or Even Rock Stars Need Estate Planning, Rivkin Radler, March 17, 2022. 

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