Wills, Trusts & Estates Prof Blog

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

Monday, October 14, 2019

Article on Charitable Tax Reform For the 21st Century

Charity1Roger Colinvaux & Ray D. Madoff recently published an Article entitled, Charitable Tax Reform For the 21st Century, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

The article identifies two goals of the charitable giving tax incentives: promoting actual charitable work and fostering a strong culture of charitable giving with broad participation. The recent increase to the standard deduction and the rise of donor-advised funds compromise both goals. The article outlines reform proposals to bolster the charitable sector, including expanding the giving incentive to all taxpayers in the form of a credit (subject to a giving floor), allowing some tax benefits to DAF donors upon contribution but delaying the income tax deduction until DAF funds are released from advisory privileges, closing loopholes that enable foundations and donors to skirt long-standing legal requirement, and modifying incentives to foundations to foster more spending.

October 14, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Friday, October 11, 2019

Article on The ‘Social Contract’, Care and Inheritance in England and Hong Kong

England flagBrian Sloan recently published an Article entitled, The ‘Social Contract’, Care and Inheritance in England and Hong Kong, Elder Law eJournal (2019). Provided below is an abstract of the Article.

In common with much of the world, the populations of both England and Hong Kong are ageing. One of the most important questions of our age is therefore how to allocate the burdens of providing and funding the care that increasing numbers of people are likely to need. Another vital question affecting the elderly and their families is that of inheritance: how legitimate is the claim of family members (including adult children) to a person’s assets? The aim of this paper is to explore the relationship between these questions, with reference to concepts such as the ‘social contract’ and family solidarity, and the law of family provision in England and Hong Kong.

October 11, 2019 in Articles, Current Affairs, Elder Law, Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (0)

Thursday, October 10, 2019

Article on How Savings and Retirement Benefit Distributions May Prudently Be Used to Make Charitable Gifts

RetirementAlbert Feuer recently published an Article entitled, How Savings and Retirement Benefit Distributions May Prudently Be Used to Make Charitable Gifts, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Individuals often fund charitable gifts with their savings or retirement benefits. Such benefits, other than those from a Roth individual retirement account or annuity, are generally included in the individual’s gross income when received. However, individuals may not be able to deduct for federal income-tax purposes any of the charitable contributions they make during the period 2018 to 2025 because the 2017 tax act substantially limited the deductibility of state and local taxes, eliminated miscellaneous itemized deductions, and dramatically increased the applicable standard deductions. On the other hand, distributions from individual retirement accounts or annuities may be eligible for the favorable tax treatment applicable to qualified charitable distributions (QCDs). This article explains the QCD requirements. The article also discusses when it is prudent to use those provisions and when it is prudent to do otherwise if savings or retirement benefits fund charitable contributions, and when it is prudent to use other funding sources, such as appreciated publicly traded securities, for charitable contributions.

October 10, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Friday, October 4, 2019

Article on Trust and Advice

TrustAndrew S. Gold recently published an Article entitled, Trust and Advice, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Trust matters to fiduciary law in a variety of ways. This chapter focuses on the importance of trust in advisory relationships, and it emphasizes two settings: categorical fiduciary relationships and ad hoc fiduciary relationships. In the categorical setting, these relationships may be appropriately treated as fiduciary in part due to the likelihood of a beneficiary’s epistemic dependence on a fiduciary’s judgements. In turn, the presence of trust supports the likelihood of that epistemic dependence. In the ad hoc fiduciary setting, advisory relationships are sometimes best seen as a kind of “involvement” (as that concept is developed in David Owens’s work). Involvements are voluntary relationships even though they may have no precise moment when they come into existence. Importantly, the existence of involvements is generally recognizable by the parties involved. Trust is relevant here as an aid in legally identifying such relationships.

October 4, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Wednesday, October 2, 2019

Article on The Kindest (Tax) Cut: A Federal Tax Credit for Organ Donations

OrgandonationSally Satel & Alan D. Viard published an Article entitled, The Kindest (Tax) Cut: A Federal Tax Credit for Organ Donations, Tax Law: Tax Law & Policy eJournal (2017). Provided below is an abstract of the Article.

We discuss how to design a federal tax credit for organ donations that would help ease the pressing shortage of donated kidneys, saving thousands of lives and sparing many from dialysis.

October 2, 2019 in Articles, Current Affairs, Disability Planning - Health Care, Elder Law, Estate Planning - Generally, New Legislation, Science | Permalink | Comments (0)

Monday, September 30, 2019

Article on Children of Assisted Reproduction vs. Old Dynasty Trusts: A New Approach

IVFKristine S. Knaplund recently published an Article entitled, Children of Assisted Reproduction vs. Old Dynasty Trusts: A New Approach, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Today, thousands of children are born each year using assisted reproduction technology (ART), including assisted insemination, in vitro fertilization, and gestational carriers, and the numbers continue to rise. Many of these children are not genetically related to one or both of their parents because donated gametes are used; in cases where a gestational carrier gives birth, the intended parents may adopt the child even if they are the genetic parents. Some of these ART children may find themselves clashing head on with old dynasty trusts that presume that adoptees are excluded from class terms such as “issue,” “descendants” or “grandchildren,” and require all beneficiaries to be related by blood to the settlor. Two recent cases, McGehee v. Edwards, 268 Va. 15 (2004) and Matter of Doe, 7 Misc. 3d 352 (N.Y. 2005) have raised this issue, but we are likely to see many more in the next few years.

Will courts treat ART children just as they have treated adopted children, parsing the difference between “issue,” “lineal descendants,” “heirs of the body,” “heirs,” and other class terms; debating whether the writer’s intent or public policy should prevail; and raising questions about whether a change in the common law presumption may or should be applied retroactively? Or should an entirely different approach be used, one that allows us to avoid extensive litigation, the invasion of privacy that extensive DNA testing would produce, and the inevitable stigmatization of children of same-sex couples who can’t be biologically related to both people raising them? This article examines the language of 74 old wills and trusts, ones that are already up and running and cannot be amended, to see if there is a better way to deal with ART children. Can the trustee use doctrines such as decanting to solve this dilemma? Can courts be persuaded to broaden their approach so that trustees or executors can accurately predict what these terms mean, and not flood the courts with requests for instructions? I will propose solutions that might just do that.

September 30, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Science, Technology, Trusts | Permalink | Comments (0)

Friday, September 27, 2019

The ‘Social Contract’, Care and Inheritance in England and Hong Kong

England flagBrian Sloan recently published an Article entitled, The ‘Social Contract’, Care and Inheritance in England and Hong Kong, Wills, Trusts, & Estate Law eJournal (2019). Provided below is an abstract of the Article.

In common with much of the world, the populations of both England and Hong Kong are ageing. One of the most important questions of our age is therefore how to allocate the burdens of providing and funding the care that increasing numbers of people are likely to need. Another vital question affecting the elderly and their families is that of inheritance: how legitimate is the claim of family members (including adult children) to a person’s assets? The aim of this paper is to explore the relationship between these questions, with reference to concepts such as the ‘social contract’ and family solidarity, and the law of family provision in England and Hong Kong.

September 27, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (0)

Wednesday, September 25, 2019

Article on Avoiding Roth IRA Taxing Tax Traps

IRASeymour Goldberg recently published an Article entitled, Avoiding Roth IRA Taxing Tax Traps, Ed Slott's IRA Advisor, October 2019. Provided below is the introduction to the Article.

Roth IRAs and other Roth plans offer tax-free cash flow to account owners and beneficiaries, once the age (59½) and holding period (five years) requirements have been met. However, tax code technicalities could lead to the taxation of all distributions of inherited Roth assets. Fortunately, certain steps can reduce that risk.

September 25, 2019 in Articles, Current Affairs, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, September 24, 2019

Article on The Location of Holographic Wills

WillKevin Bannardo & Mark Glover recently published an Article entitled, The Location of Holographic Wills, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

North Carolina should abolish its location requirement for making a holographic will. Under the North Carolina holographic wills statute, a handwritten document must be found in an approved location after its author’s death in order to be regarded as a holographic will. No other state has mandated a location requirement for holographic wills since 1941.

The location requirement furthers neither of the core functions of will execution formalities: it makes probate courts’ decisions less efficient but no more accurate. And, because holographic wills in North Carolina are not technically executed until they are found postmortem, confounding doctrinal issues arise when testators attempt to revoke them before death. The location requirement of the holographic wills statute imposes costs without countervailing benefits.

Thus, the North Carolina General Assembly should abolish the location requirement from the holographic wills statute. In its place, the location in which a decedent stores a purported holographic will should be relegated to simply one contributing factor in assessing testamentary intent. Such a revision would reflect sound policy and bring North Carolina into accord with the rest of the country when it comes to the making of holographic wills.

September 24, 2019 in Articles, Current Affairs, Estate Planning - Generally, Wills | Permalink | Comments (0)

Saturday, September 21, 2019

Article on Directed Trusts: A Primer on the Bifurcation of Trust Powers, Duties, and Liabilities in Special Needs Planning

TrustWilliam D. Lucius, Esq., and Shirley B. Whitenack, Esq., CAP, Fellow recently published an Article entitled, Directed Trusts: A Primer on the Bifurcation of Trust Powers, Duties, and Liabilities in Special Needs Planning, NAELA News Journal, August 2019. Provided below is an introduction to the Article.

The provision of legal services in the fields of elder law and special needs planning has expanded over the past decade into a client-focused, holistic, and collaborative approach. Consequently, this developing philosophy has permeated into the estate plans and trust instruments related to these fields, such as special needs trusts (SNTs) and settlement preservation trusts (SPTs), wherein the selection of an appropriate fiduciary is no longer a choice between two or among several individuals or corporate trustees. Nontraditional “multiparticipant trust agreements,” in which the “powerholders” may be a potpourri of trustees, co-trustees, distribution directors, investment advisers, trust advisory committees, and trust protectors, are becoming more commonplace. With the advent of directed trusts, these powerholders may now encroach upon the traditional trustee’s once overarching authority and compel the trustee to act (or not act) in furtherance of the trust’s objective.

Consider the case of Nathaniel. Like most 4-year-olds, Nathaniel was curious and adventurous in equal measure. Due to the alleged negligence of a day care employee, Nathaniel left his day care facility through an open gate and wandered unsupervised to an adjacent parking lot. When Nathaniel attempted to climb through a half-open car window, his head became stuck and he could no longer support his weight. The near-strangulation caused a significant, irreversible traumatic brain injury. Now 8 years old, Nathaniel is incapacitated, has no gait strength or swallowing reflexes, has frequent seizures, and requires 24-hour supervised care. Nathaniel’s parents sued the day care provider and parking lot owner, securing an $8 million cash settlement, which includes a 40-year guaranteed structured annuity payment of $4,500 per month, adjusted 3 percent annually. The court that approved the settlement ordered the establishment of a first-party SNT for Nathaniel’s benefit that included, in part, the following language:

Art. 1.1 — Trust Company, N.A., shall serve as the initial Corporate Trustee. Distribution Directors, Inc., shall serve as the initial Distribution Director under this Agreement. Each of the entities shall serve as fiduciaries but shall only be responsible for the decisions that fall within their respective authorities as defined hereunder. Both may rely conclusively on the other if that instruction relates to a matter under the other’s purview, and neither shall have a duty nor obligation to review the underlying actions of the other.

Art. 1.2 — During the lifetime of Nathaniel, Distribution Director may direct Corporate Trustee to distribute, from income, principal, or both of this Trust, such amounts as the Distribution Director, in its sole, absolute, and unfettered discretion, may from time to time deem advisable or reasonable for Nathaniel’s special needs.

Art. 9.1 — Nathaniel’s mother is appointed as Trust Protector. The Trust Protector shall not be entitled to compensation for services rendered but shall be entitled to reimbursement of reasonable expenses in the exercise of her services. The Trust Protector is authorized, in her sole and absolute discretion, to remove from office, without Court approval, any Corporate Trustee or Distribution Director appointed herein, with or without cause and for any reason whatsoever, and may replace such Corporate Trustee or Distribution Director with another Corporate Trustee or Distribution Director who is not related to or subordinate to the Beneficiary (within the meaning of Internal Revenue Code § 672(c)) to act in place of the Corporate Trustee or Distribution Director so removed.

In Nathaniel’s case, by ordering a trust with bifurcated duties among various parties, the court followed the advice of the guardian ad litem, who recommended a multiparticipant directed trust arrangement to best address the investment management and discretionary decision-making complexities that will likely last the length of the trust’s administration.

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

September 21, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)