Wills, Trusts & Estates Prof Blog

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

Tuesday, November 13, 2018

Article on Tax as Part of a Broken Budget: Good Taxes Are Good Cause Enough

TreasuryStephanie Hunter McMahon recently published an Article entitled, Tax as Part of a Broken Budget: Good Taxes Are Good Cause Enough, Tax Law: Tax Law & Policy (2018). Provided below is an abstract of the Article.

The federal budget is a myth. Despite being a myth, Congress uses the budget to limit its choices by linking its revenue-raising and spending powers under a federal debt ceiling. Through its self-imposed limits, Congress puts tremendous pressure on how it calculates its budget, and that calculation generally assumes any tax provisions will raise revenue when the law becomes effective. However, many tax provisions require additional direction to ensure they operate as the budgetary process expects. That task falls to the Treasury Department and the Internal Revenue Service (IRS) as a bureau of the Department. Consequently, limiting the production of tax rules that implement, interpret, and sometimes limit possible interpretations of tax statutes is problematic because their projected revenue is used to balance the budget. Nevertheless, these Treasury Department rules are under attack on the grounds that their issuance fails to comply with the Administrative Procedure Act (APA). The APA generally requires notice and comment for the promulgation of rules, a costly process in terms of time and agency resources. This Article argues that there should be a wider acceptance of the good cause exception for the speedier issuance of tax regulations and other IRS-level implementing materials in order to satisfy Congress’s revenue expectations.

November 13, 2018 in Articles, Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Monday, November 12, 2018

Corpse Hotels Cater to Japan's Waiting Dead

HotelJapan has seen an exponential increase in its aging population, and the reality of this statistic is that there has also been a significant increase in the number of the dead, with a record of 1.34 million last year. With the small country unable to bury their loved ones that passed on, families must cremate them. But in many urban areas there is a wait for crematories, often up to a full week.

In the interim, people are turning to corpse hotels, where their deceased family member can await cremation in tasteful, competitively priced comfort, and families can say farewell at their leisure.  Those moments can be conducted with the help of an automated coffin-retrieval system, which quietly trundles the correct casket up from the storage area. Gone are the sterile environments of morgues, instead replaced by private viewing rooms and even suites that resemble the first floor of a traditional Japanese home where families can dine together with a perspex coffin containing the body. Management is particularly proud of the miniaturized refrigeration unit that makes this possible.

Corpse hotels are attempting to ease the tide, as it is predicted that between now and 2040 the death toll will continue to rise to a peak of 1.7 millions annually.

See Leo Lewis, Corpse Hotels Cater to Japan's Waiting Dead, Financial Times, November 7, 2018.

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

November 12, 2018 in Current Affairs, Death Event Planning, Elder Law, Estate Planning - Generally, Travel | Permalink | Comments (0)

Article on Age, Time, and Discrimination

AgetimeAlexander A. Boni-Saenz recently published an Article entitled, Age, Time, and Discrimination, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Discrimination scholars have traditionally justified antidiscrimination laws by appealing to the value of equality. Egalitarian theories locate the moral wrong of discrimination in the unfavorable treatment one individual receives as compared to another. However, discrimination theory has neglected to engage seriously with the socio-legal category of age, which poses a challenge to this egalitarian consensus due to its unique temporal character. Unlike other identity categories, an individual’s age inevitably changes over time. Consequently, any age-based legal rule will ultimately yield equal treatment over the lifecourse. This explains the weak constitutional protection for age and the fact that age-based legal rules are commonplace, determining everything from access to health care to criminal sentences to voting rights. The central claim of this Article is that equality can neither adequately describe the moral wrong of age discrimination nor justify the current landscape of statutory age discrimination law. The wrong of age discrimination lies not in a comparison, but instead in the deprivation of some intrinsic interest that extends throughout the lifecourse. Thus, we must turn to non-comparative values, such as liberty or dignity, to flesh out the theoretical foundation of age discrimination law. Exploring this alternative normative foundation generates valuable insights for current debates in discrimination theory and the legal regulation of age.

November 12, 2018 in Articles, Current Affairs, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Discussing the Issue of Aging Parents

DinnerThe recent changes in the tax law may induce several families to bring up the uncomfortable topic of aging parents this holiday season. But these types of conversations can offset the possibility of any unpleasant surprises in the future.

The decision will ultimately be up to the parents, but even if children are to be the ones that bring up the subject, preparation and research should be done beforehand. Durable power of attorney, health care agent and executor are all positions that have certain responsibilities and requirements. Each one should be discussed with family members or close friends, or if those parties are not acceptable (or they decline), other arrangements should be considered.

A frank discussion of parental assets may make it easier for children to understand the overall planning objectives and decision-making process. An understanding of parental assets can also help with long and short term planning, ranging from tax strategies and charitable giving to options in the event of a long-term care illness. The increase in the standard deduction many people will no longer itemize deductions, and the increased federal estate tax exemption of $11,180,000 may make some charitable donations obsolete - for tax benefit purposes. Beneficiaries may also benefit from a step-up basis for highly appreciated assets, thus saving in capital-gains taxes.

See Kristin Shirahama, Discussing the Issue of Aging Parents, Financial Advisor, November 6, 2018.

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

November 12, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation, Wills | Permalink | Comments (0)

Sunday, November 11, 2018

Article on Abandoning Realization and the Transition Tax: Toward a Comprehensive Tax Base

Tax actHenry Ordower recebtly published an Article entitled, Abandoning Realization and the Transition Tax: Toward a Comprehensive Tax Base, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

The Tax Cuts and Jobs Act of 2017 imposed a tax, the “transition tax,” on as much as 31 years of undistributed, accumulated corporate income. This article focus on that transition tax as it evaluates the function and constitutionality of the tax and considers whether the transition tax might serve as a model for addressing the broader problem of deferred income in the United States. The article views the transition tax as joining the expatriation tax and other mark to market inclusion provisions in abandoning any pretext that there is continued vitality in the realization principle as something more compelling than any other longstanding and obsolescing tax principle. Recommending that Congress seize the Tax Cuts and Jobs Act moment and discard the general rule deferring the inclusion of gain in income through a realization requirement in favor of the annual marking to market of all the taxpayer’s property, the article models a general mark to market transition tax after the new transition tax on deferred foreign income. The proposal recommends inclusion of the net gain in taxpayers’ incomes at significantly reduced rates of tax, including one rate for liquid assets and a lower rate for illiquid assets and an opportunity to pay the tax in installments. Following the initial inclusion under this transition tax, gain and loss would be included annually consistent with comprehensive tax base definitions under an accrual system of taxation based on marking to market. Growth or decline in the value of taxpayers’ property would be taken into account income annually. In some instances permitting some taxpayers to defer payment of the tax until disposition of the property may be desirable but the continued deferral might incur an interest charge.

November 11, 2018 in Articles, Current Affairs, Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Saturday, November 10, 2018

Article on Testamentary Freedom and Family Protection in Scotland

ScotlandKenneth Reid recently published an Article entitled, Testamentary Freedom and Family Protection in Scotland, Wills, Trusts, & Estate Law eJournal (2018). Provided below is an abstract of the Article.

In a sense, testators in Scotland are free to do as they please, for a will is not challengeable on the ground of having failed to provide for children, or a spouse, or some other relative. Yet, regardless of what a will says or does not say, a child or spouse of the deceased is entitled to a fixed share of the deceased’s estate. Since 1964 this has been confined to the deceased’s movable estate and there is no claim in respect of immovable property. Where a deceased is survived by both spouse and children, the movable estate is divided into three – one-third for the spouse, one-third to be shared among the children, and one-third to be disposed of in accordance with the will. Where only a spouse, or only children, survive, the division is into two equal parts and not three. These ‘legal rights’ of the children and surviving spouse are personal rights against the executor of the deceased and are satisfied by payment in money.

This paper considers the history of legal rights in Scotland, their scope and calculation, the rules on discharge, the requirement to collate lifetime advances, and the requirement to choose between legal rights and an express bequest in the will.

Legal rights are of medieval origin, and have survived various attempts to change them. In recent years, the position of children has been seen as especially controversial. On one view, children should have merely a maintenance claim from the deceased’s estate, in cases of proved need. On another view, a child’s position in the family should continue to be recognised by means of a fixed share in their late parent’s estate. In the absence of consensus on this issue, the Scottish Government has recently rejected a package of reforms proposed by the Scottish Law Commission. Uncertain as to what the future should hold, Scotland has chosen to stick with rules developed, unthinkingly, in the distant past.

November 10, 2018 in Articles, Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Friday, November 9, 2018

A To-Do List for Widows, and How to Protect the Identity of a Dead Loved One

Calla-liliesWidows and widowers are often facing debilitating grief while attempting to get their lives, futures, and finances in order. Having an effective plan and to-do list in place could make this difficult time more emotionally manageable. Also, having a deceased loved one's identity stolen can be a painful reminder of their absence, and a great violation to their memory, so taking steps to prevent it are important.

  • Inform Social Security of the loved one's death and notify all credit bureaus as well to freeze the person's credit.
    • Death Certificate and letters testamentary will be required.
  • Notify tax preparer, and financial institutions.
    • In the event that there is a non-qualified account then there should be a step-up in basis on at least 50% of the account and possibly 100% of the account, depending on the circumstances.
    • And IRA can be treated as a rollover account for a spouse
  • Review life insurance policies and see your options so you can decide what makes the most sense based on cash flow needs.
  • Meet with an estate planning attorney if there was a will or trust to understand the loved one's final wishes.
  • Have a tax projection prepared.
  • Sign proper forms for all brokerage accounts and new account forms in order to reflect the new ownership and title.

See Karin Price Mueller, A To-Do List for Widows, and How to Protect the Identity of a Dead Loved One, NJ.com, November 6, 2018.

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

November 9, 2018 in Current Affairs, Elder Law, Estate Administration, Estate Planning - Generally, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Thursday, November 8, 2018

ALPS 10th Annual Meeting

CLEThe Association for Law, Property, and Society (ALPS) is holding its 10th Annual Meeting on May 16-18, 2019 at the Syracuse University College of Law in Syracuse, New York.

Come join Property Scholars from around the globe for panels on Property Rights, IP, Environmental Law, Private Property, Public lands, Land Use, Natural Resources, Indigenous Persons, Legal Geography, Personal Property, Property Theory and More! 

November 8, 2018 in Conferences & CLE, Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Dennis Hof Wins Election From the Grave

HofDennis Hof, the owner of several brothels in the state of Nevada, was found dead the morning of October 16 after celebrating his 72nd birthday with friends and politcal comrades. Officials are still determining his cause of death, but they do not suspect foul play.

Hof was running for Nevada's 36th Assembly District as a Republican against Democratic educator Lesia Romanov, and ultimately won the seat. The district is one that is regularly held as a Republican and touches both California and Utah and includes the Nevada National Security Site where nuclear weapons were once tested.  Due to his passing being so close to the election his name remained on the ballot. County officials will appoint a Republican to take his place in the seat.

He had run for office in 2016 as a Libertarian, but ultimately lost. After revamping himself as a Trump-style Republican, Hof earned backing from Trump associate Roger Stone and tax-cut activist Grover Norquist.

See Associate Press, Dennis Hof, the Brothel Owner who Died Last Month, Wins Election, NBC News, November 7, 2018.

November 8, 2018 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0)

New Act: the Kasem/Baksys Visitation Law [Illinois]

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-11-08/4b58c44f-1771-4700-bd84-946ed0cccafb.pngThis bill would create the “Frail Individual Family Visitation Protection Act”, aka the Kasem/Baksys Visitation Law.  It defines a "frail individual" and permits family members of a frail individual to petition the court for visitation if a caregiver is unreasonably preventing visitation.  NAELA originally opposed the bill as it lacked many important limiting provisions.  Through the legislative process, the bill was amended to exclude guardianships and POAs and to include other procedural protections to ensure that the “frail individual’s” rights and interests were protected.  Moreover, we sought to ensure that a proper legal process was articulated to address any such actions.  HB4039 passed unanimously out of the House and Senate and is now on Governor Rauner’s desk awaiting signature. Thank you to Rep. Sara Wojiecki-Jimenez (D-Springfield) and Sen. Melinda Bush (D-Grayslake) for their hard work on this bill.

See Tony Abboud, NAELA Post-Legislative Session Report #1, NAELA-IL.org, August 10, 2018.

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

November 8, 2018 in Current Affairs, Current Events, Elder Law, Estate Planning - Generally, New Legislation | Permalink | Comments (0)