Wills, Trusts & Estates Prof Blog

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

Tuesday, February 20, 2024

Alabama Supreme Court rules frozen embryos are children, imperiling IVF

Estate planningThe Alabama Supreme Court ruled last week that frozen embryos are legally considered people, holding those accountable for the destruction of embryos. This landmark decision is considered a victory by anti-abortion activists, which may have significant consequences for reproductive rights, particularly in the realm of in vitro fertilization (IVF). 

With at least 11 states defining personhood as starting at fertilization and ongoing debates over abortion and reproductive restrictions, the ruling amplifies concerns ahead of the 2024 elections. The case in Alabama involved a wrongful death lawsuit where a patient accidentally destroyed another couple's embryos. The court's ruling, which overruled a lower court, emphasized that unborn children, including frozen embryos, are protected under existing laws. 

This decision could set a precedent with far-reaching implications, potentially affecting IVF procedures, contraceptives, and healthcare providers' practices. Critics fear it could increase the cost of IVF, prompt clinic closures, and deter patients from pursuing fertility treatments due to legal risks.

Critics have also noted the Alabama chief justice's use of theology in the ruling, expressing concern that a judge's religious beliefs could influence personal decisions. The ruling did not clarify if embryo destruction under any circumstance would be permitted. While the plaintiffs had agreed to terms allowing for embryo destruction or donation after a specified period, the court did not address this due to the trial court's oversight. The decision underscores how overturning Roe v. Wade has empowered judges and legislators to restrict more than just abortion, leaving the extent of state and court authority uncertain.

For more information see Dan Rosenzweig-Ziff  “Alabama Supreme Court rules embyros are children, imperiling IVF”, The Washington Post, February 19, 2024.

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

February 20, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Friday, February 2, 2024

Canada Delays Plans To Euthanize Mentally Ill People But Not Because It's An Insane Plan

CanadaThe Canadian government's plan to allow euthanasia for the mentally ill has faced a setback, with Health Minister Mark Holland citing the unpreparedness of the healthcare system. 

 

Critics argue that the idea of euthanizing the mentally ill is grotesque and raises moral questions about determining the worth of lives. Some question the government's priorities, highlighting instances during the COVID era where citizens were penalized for activities deemed essential for mental health.

 

For more information see Joe Kinsey “Canada Delays Plans To Euthanize Mentally Ill People But Not Because It’s An Insane Plan”, Outkick, February 1, 2024.

February 2, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 23, 2024

Vermont Becomes Latest State to Propose Wealth Taxes

Estate planningVermont lawmakers are proposing new legislation to impose taxes on the state's wealthiest residents, aligning with a national campaign led by Democrats to address post-pandemic budget challenges. One proposal targets individuals with more than $10 million in net worth, taxing their unrealized capital gains. Another suggests a 3 percent marginal tax on individual incomes exceeding $500,000 annually. These measures, sponsored by State Representative Emilie Kornheiser, aim to alleviate the tax burden on the middle class and generate revenue, with supporters estimating a potential $98 million influx into the state's budget. The initiative is part of a broader Tax Justice Initiative, echoing Senator Elizabeth Warren's federal wealth tax proposal and gaining momentum as several states consider similar measures.

The campaign faces challenges in states like California, where Governor Gavin Newsom rejected the idea of a wealth tax to address a budget deficit. In Vermont, the legislature is under Democratic control, but Governor Phil Scott, a moderate Republican, remains cautious about taxing the wealthy further. However, the push for wealth tax is fueled by public frustration over perceived inequalities in the tax system, with a significant majority expressing concern that the wealthiest individuals aren't paying their fair share. Over 250 billionaires and millionaires have even advocated for increased taxation on the wealthy. As of 2024, lawmakers in 10 states, including California, Connecticut, New York, and Vermont, have introduced or are working on wealth-tax bills.

For more information see David W. Chen “Vermont Becomes Latest State to Propose Wealth Taxes”, The New York Times, January 23, 2024.

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

January 23, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Monday, January 22, 2024

'Composting grandpa' bill moves through Arizona Legislature

FuneralState lawmakers in Arizona are considering a bill that would legalize natural organic reduction, also known as human composting, as an alternative to cremation and burial. 

This process uses microbes to break down the body over several weeks, resulting in nutrient-dense soil that can be used for planting trees or flowers. Natural organic reduction is promoted as an eco-friendly burial option, and several states, including Washington, California, and New York, have already legalized it. 

The bill in Arizona, which received unanimous approval in the House Regulatory Affairs Committee, may provide residents with an additional choice for the disposition of their loved ones. 

For more information, see Wayne Schutsky  “'Composting grandpa' bill moves through Arizona Legislature”, Fronteras Politics, January 19, 2024.

January 22, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, January 18, 2024

Pennsylvania Appellate Court Issues Important Win For Parents Using Assisted Reproduction

ChildrenIn a landmark December 11, 2023 ruling, the Superior Court of Pennsylvania overturned a prior decision in Junior v. Glover, favoring the nonbiological parent, Nicole Junior. The case involved a same-sex couple who utilized assisted reproduction to conceive a child. Despite the couple's joint efforts and various agreements to secure parental rights, they separated before the child's birth, triggering a legal dispute. The initial three-judge panel had denied parental recognition to Junior, citing the absence of an enforceable agreement. However, the court, led by Judge J. Bowes, identified an enforceable oral contract between the parties, supporting Junior's claim as a legal parent.

The court explored multiple parentage theories, including the marital presumption, intent-based parentage, and parentage by estoppel. Despite the couple's short marriage and ongoing divorce proceedings, the court did not apply the marital presumption in Junior's favor. However, it endorsed the doctrine of "intent-based parentage," a legal theory recognizing parentage based on the parties' intentions in assisted reproduction cases. The decision faced objections from a concurring judge who argued against the appellate court introducing new legal doctrines.

While supporters hailed the ruling, an appeal to Pennsylvania's highest court was filed by Glover. The outcome of the appeal could further solidify the recognition of parentage by intent in assisted reproduction cases, providing crucial protections for same-sex couples and individuals using fertility treatments. The case underscores the significance of legal precautions for same-sex couples and parents navigating assisted reproduction methods to ensure the recognition of their parental rights.

For more information see Ellen Trachman “Pennsylvania Appellate Court Issues Important Win For Parents Using Assisted Reproduction”, Above the Law, January 17, 2024.

January 18, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, January 3, 2024

This couple is fighting $15,000 in taxes. Their case could cost Washington trillions

SCOTUSThe Supreme Court recently heard a case involving Charles and Kathleen Moore, who contested a $14,729 tax claim on their investment in an Indian company. Despite the seemingly straightforward tax dispute, the case could have broader implications, potentially challenging federal taxes and impacting proposals to tax the ultra-rich. 

The Moores argue that since they did not receive profit from their investment and it was reinvested in the company, they should not be taxed. A ruling favoring the Moores might destabilize the tax system and lead to challenges on other tax code provisions, with potential costs exceeding $5 trillion. The conservative majority on the Supreme Court expressed skepticism about the Moores' argument but also sought a narrow outcome, signaling the case's significance beyond the immediate dispute.

For more information see John Fritze “This couple is fighting $15,000 in taxes. Their case could cost Washington trillions”, Yahoo! News, December 6, 2023.

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

January 3, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 2, 2024

Gatekeepers beware: the new US corporate transparency act could be a game-changer

Estate planningThe US Corporate Transparency Act (CTA), effective January 1, aims to combat financial crimes by requiring certain entities to disclose beneficial ownership information to the US Department of the Treasury. Contrary to skepticism that entities like "Tony Sopranos" will not comply, the CTA's significant impact lies in holding corporate service providers accountable, including lawyers, trustees, and accountants, who facilitate money laundering. 

The law imposes federal disclosure requirements, making service providers associated with created entities in a federal database, creating potential liabilities for misdeeds. The CTA introduces penalties for non-compliance, leading to a new frontier for the corporate services industry. Service providers must enhance vetting procedures, identify red flags, and adopt compliance programs to navigate the evolving regulatory landscape.

For more information see Jamie Schafer “Gatekeepers beware: the new US corporate transparency act could be a game-changer”, Financial Times, December 18, 2023.

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

January 2, 2024 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, November 23, 2023

The IRS Is Cracking Down on an Insurance Strategy Commonly Used as a Tax Shelter

IRSThe IRS is intensifying efforts to curb micro-captive insurance, a method companies employ to self-insure and exploit tax benefits. Micro-captives, often considered abusive by the IRS, allow small business owners to pool premiums and cover various risks. 

Recent funding under the Inflation Reduction Act has empowered the IRS to enhance enforcement through advanced technology and cross-departmental collaboration. Micro-captives enable owners to deduct up to $2.65 million in premiums. Still, misuse of these structures for investment purposes has triggered IRS scrutiny. The agency aims to identify and audit complex abusive tax schemes associated with micro-captive insurance.

For more information see Karen Hube “The IRS Is Cracking Down on an Insurance Strategy Commonly Used as a Tax Shelter”, Barrons PENTA, November 14, 2023.

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

November 23, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, November 9, 2023

NEW Tax Exemptions for 2024

The Treasury and the IRS have provided updated figures for various provisions of the Internal Revenue Code for the year 2024. In the estate, gift, and generation-skipping tax realm, specific numbers have now been confirmed after being estimated for over a month. Here are some key figures:

  • The Unified Credit Against Estate Tax basic exclusion amount will be $13,610,000 under Section 2010. That number is the same for the generation-skipping transfer tax exemption.

  • The Annual Exclusion for Gifts will be the first $18,000 of gifts to any person (other than gifts of future interests). The first $185,000 of gifts to a spouse who is not a citizen of the United States will not be included in total amounts of taxable gifts under Sections 2503 and 2523(i)(2).

For more information, see Internal Revenue Bulletin 2023-34, November 9, 2023.

November 9, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Monday, November 6, 2023

IRS raises 401(k), IRA contribution limits for 2024

Estate planningThe IRS announced last week an increase in the maximum contribution limits for various retirement savings accounts in 2024. Workers can now set aside up to $23,000 in their 401(k) plans, a $500 increase from the previous year. 

The same adjustments apply to other accounts like the 403(b), most 457 plans, and the federal government's Thrift Savings Plan. Catch-up contributions for individuals aged 50 and older will remain at $7,500. 

Additionally, the maximum contribution for IRAs has been raised to $7,000 from $6,500, with the catch-up contribution limit remaining at $1,000. This adjustment results from the IRS making annual cost-of-living changes, with the increases being more substantial during periods of high inflation. 

For more information see Megan Henney “IRS raises 401(k), IRA contribution limits for 2024”, Fox Business, November 2, 2023.

November 6, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)