Wills, Trusts & Estates Prof Blog

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

Thursday, March 21, 2019

Real Estate for the Afterlife

CemeteryLiving in New York City is expensive, but it appears that also residing in the city that never sleeps after death takes a large amount of money. Cemetery plots as well as above ground crypts have increased in price significantly over the years, with basic plots across the boroughs generally priced from $4,500 to $19,000, not including hefty fees for foundations, interments and maintenance. The cheapest can be found on Staten Island, but if you want to rest in a rare spot in Manhattan you could be spending upwards of $1 million.

Cemetery directors fully understand the concept that land is a finite resource in New York and have been coming up with ingenious ways to extend the occupancy of cemeteries, especially with the new popularity of cremations. Plots have decreased in size over the years and some are even "double-depth," a plot that can contain two coffins on top of each other. Just as New Yorkers with small apartments have been forced to turn dining rooms into bedrooms and closets into home offices, cemeteries, too, have gotten creative. Walkways, roadways, and other paths have been removed to make up for more grave sites.

Many cemeteries in New York are building columbaria, aboveground structures with niches that can hold hundreds or even thousands of urns for cremains. The niches within the structures can have glass fronts in which survivors can view the urns, which are often then accompanied by photos and other articles of their deceased loved one. Trinity Church's cemetery in Manhattan no longer accommodates in-ground burials, and aboveground crypts can run as high as $60,000 for a single coffin, while niches for a single urn range from $1,900 to $6,500.

See Jane Margolies, Real Estate for the Afterlife, New York Times, March 15, 2019.

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

March 21, 2019 in Current Affairs, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, March 20, 2019

Article on Estate Planning for Mary Jane and Other Marijuana Users

WeedGerry W. Beyer and Brooke Dacus recently published an Article entitled, Estate Planning for Mary Jane and Other Marijuana Users, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is the introduction of the Article.

An estate planner is more likely to encounter a client who regularly uses marijuana than a client who needs estate and gift tax planning, given that 55 million Americans are current users. Christopher Ingram, How Many Americans Regularly Use Pot: The Number Is, errr, Higher Than You Think, Wash. Post, April 20, 2018. At least 32 states and the District of Columbia currently exempt qualified users of medicinal marijuana from penalties imposed under state law. Additionally, ten states, Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington, and the District of Columbia authorize purely recreational use. See Legal Recreational Marijuana States and DC, ProCon.org (last visited Nov. 11, 2018). Accordingly, practitioners need to be aware of the interface between marijuana and estate planning.

This article provides a discussion of the major issues that arise in this context including: (1) impact of marijuana use on capacity; (2) interpretation of clauses conditioning benefits on the non-use of illegal drugs; (3) life insurance issues; and (4) marijuana-based assets in a decedent's estate or trust.

March 20, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Trusts, Wills | Permalink | Comments (0)

2 Ways to Combine Charitable Giving and Life Insurance

LifeinsuranceFinancial planning can be an ongoing process as life can be ever-changing. Sometimes having a life insurance policy can be the sole manner in which to preserve household wealth, while other times in can be more efficient to combine it with charitable giving.

If you no longer need a particular life insurance policy, you can simply give it away. You may donate it outright to a certain charity, or used a Donor Advised Fund (DAF). By changing the ownership, you can be done with it and may even be able to take a charitable income tax deduction for the value of the policy at the time of the gift. But there may be an issue of ongoing premiums, which would also shift to the charity. You can either continue to pay the premiums for the charity either to the charity itself or to the insurance company, or “you could convert the policy to a reduced and paid-up policy and donate it with no ongoing premiums needed," according to Dana Holt, CEO of HOLT Consulting.

You may also give a new life insurance policy to a charity, but the charity must have an insurable interest in the donor (you). If this is hard to manage, you could also name the charity as a beneficiary of the policy, either as a partial or full beneficiary, or to a trust that establishes the charity as the trust beneficiary to maintain more control over the funds.

See Jamie Hopkins, 2 Ways to Combine Charitable Giving and Life Insurance, Forbes, March 6, 2019.

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

March 20, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

CLE on Tax Treatment of Crytpocurrencies: What You Need to Know

CLEThe American Law Institute is holding a webcast entitled, Tax Treatment of Crytpocurrencies: What You Need to Know, on Friday, April 5th, 2019 from 1:00 - 2:00 p.m. Eastern. Provided below is a description of the event.

Why You Should Attend
There’s a lot of buzz surrounding cryptocurrency as digital currency platforms gain acceptance for business transactions. There’s also an equal amount of confusion around how to treat cryptocurrencies for federal income tax purposes. Although the IRS has offered some guidance treating some cryptocurrencies as property, the buying, selling, and trading of cryptocurrencies, such as Bitcoin, for investment can still raise a lot of questions. The increasing use of digital money has resulted in new ways to acquire and use cryptocurrency, which raises further challenges. Legal counsel, tax advisers, and compliance professionals must fully understand the tax obligations to meet these compliance challenges.

What You Will Learn
Even though the IRS classifies all cryptocurrencies as property, there is still widespread uncertainty over the more complex factors when determining tax liability. Join us for this 60-minute webcast that focuses on the taxable events of cryptocurrencies and compliant reporting issues, including:

• Virtual currency tax compliance issues
• IRS Notice 2014-21: What is and isn’t addressed
• Tax treatment of Forks and Airdrops
• Token offerings and SAFTs
• Reporting obligations

All registrants will receive a set of downloadable course materials to accompany the program.

Who Should Attend
This program is for any lawyer or accountant who is looking for a deeper understand of the tax obligations for cryptocurrencies.

March 20, 2019 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Technology | Permalink | Comments (0)

Tuesday, March 19, 2019

Article on Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience

IowaE. Gary Spitko recently published an Article entitled, Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience, 103 Iowa L. Rev. 2175 (2018). Provided below is an abstract of the Article.

No U.S. state affords intestate inheritance rights to the unmarried and unregistered committed partners of a decedent. This omission has become more and more problematic in recent years as cohabitation rates in the United States has risen and marriage rates have decline. Indeed, the phenomenon of increasing cohabitation rates and declining marriage rates is observed across the developed word. Unlike in the United States, however, a significant number of foreign jurisdictions have reformed their law to afford intestate inheritance rights to a decedent's surviving unmarried committed partner.

This Article looks to Scottish law to inform consideration of how U.S. states might best reform their intestacy statutes so as to provide intestate inheritance rights to a surviving unmarried committed partner. Examination of Scottish law should provide especially fruitful for U.S. law reformers. The relevant Scottish statutory provisions have been in effect since 2006 and have been extensively critiqued by Scottish courts, academics, and practitioners. Indeed, the Scottish Law Commission ("SLC"), whose recommendations led to adoption of the current scheme, has called for repeal of these intestacy provisions, and has offered a replacement scheme. Moreover, Scottish succession law and U.S. succession law share significant norms valuing certainty and preferring fixed entitlements and limited judicial discretion.

The Article evaluates the Scottish statute with respect to three major issues of principle that should be at the center of U.S, reform discussions: fulfillment of purpose, implications for certainty and administrative convenience, and implications for marriage. The Article similarly evaluates the SLC's proposal to replace the current statute. Finally, the Article reflects upon the Scottish statute and the SLC proposal in considering which element of Scottish law a U.S. state might profitably borrow or should reject in an effort to craft a more inclusive approach to the intestate inheritance rights of unmarried committed partners consistent with the principles of U.S. succession law. The jumping off point for this discussion is this author's previously published proposal for a model statute that implements an accrual/multi-factor approach to intestate inheritance rights for unmarried committed partners. After describing the significant features of this proposal, the Article considers how one might evolve the proposed accrual/multi-factor approach to incorporate the lessons learned from the Scottish experience.

March 19, 2019 in Articles, Current Affairs, Estate Planning - Generally, Intestate Succession, New Legislation | Permalink | Comments (0)

Monday, March 18, 2019

Baby Boomers More Prepared For Dying Than Living

RetirementAccording to a recent report from the Bankers Life Center for a Secure Retirement, baby boomers have become ready for death but have missed preparing for the years before it. The survey questioned 1,500 baby boomers (between the ages of 54 and 72) with incomes between $30,000 and $100,000, and the answers were surprising.

Only 18% had placed a high priority on receiving long-term healthcare or residing in a nursing home during their retirement, even though a much higher number of individuals said they expected to receive such care (45%). However, the Department of Health and Human Services said this number is still too low, predicting that a person that turns 65 this year will have a 70% of needing long-term care in their lifetime. Many people are placing their priorities in the after life, as 81% of those surveyed had made at least one formal preparation for what will happen when they die.

It is hard to determine if it is false confidence or denial when faced with these numbers: 79% of the boomers surveyed admitted that they had not set aside any money for long-term care yet 74% felt confident in their ability to manage their household’s health-care needs as they age.

See Christopher Robbins, Baby Boomers More Prepared For Dying Than Living, Financial Advisor, March 15, 2019.

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

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

March 18, 2019 in Current Affairs, Current Events, Disability Planning - Health Care, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, March 17, 2019

High Court Should Affirm Kaestner State Trust Tax Case

CourtroomNorth Carolina’s Supreme Court held that the state cannot tax the income of a trust created and administered outside of North Carolina, even though the trust’s beneficiaries reside in North Carolina in Kimberly Rice Kaestner 1992 Family Trust v. North Carolina Department of Revenue. Now, the nation's higher court has agreed to hear the case.

The lower court founded its decision on two premises: that a trust is a separate entity from the beneficiaries - much like a corporation, and that the trust such as the one in the case lacked the required minimum contacts constitutionally required to be subject to taxation by the state. South Dakota v. Wayfair may have modified the minimum contacts requirement under the Commerce Clause, the due process analysis from Quill Corp. v. North Dakota remained the same. Because the state supreme court applied the proper analysis, the Supreme Court of the United States should affirm the decision.

“Purposeful availment” for minimum contact purposes pertains to the trust’s governance and the administration of its assets, not to trust communications with beneficiaries. Just because the beneficiaries reside in North Carolina does not give the state enough contact with the trust to tax the trust itself.

See Edward Zelinsky, High Court Should Affirm Kaestner State Trust Tax Case, Tax 360, March 5, 2019.

March 17, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0)

Saturday, March 16, 2019

Article on Family Protection in the Law of Succession: The Policy Puzzle

PuzzleRichard Storrow recently published an Article entitled, Family Protection in the Law of Succession: The Policy Puzzle, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

To promote the protection of families, succession law diminishes the power of testation in a variety of ways that shield surviving spouses and children from disinheritance. The article conducts a survey of the law in fifty states, five main territories, and the District of Columbia and uncovers a remarkable diversity of family-protection provisions. Less apparent than the substance of the provisions themselves are the policies behind them. In a comprehensive study, this article concludes that family-protection provisions seek to prevent decedents from using their testamentary freedom in ways that impoverish those who are dependent upon them or that work unfairness against family members who have contributed in important ways to the accumulation of their wealth. In addition to these concerns is a notable ambivalence about the extent to which family protection statutes should undercut the expectations of those who have been promised a share of a decedent’s estate.

March 16, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, New Legislation, Trusts, Wills | Permalink | Comments (0)

Putting Fido in the Will Not Just for Super-Rich

It is becoming more commonplace for people to consider their pets as part of their family, and as such more people are also including their dog, cat, or other furry loved on in their estate plans. And it is not just the wealthy, though those are the ones that garner the most attention and media. 

Pets“Setting up trusts for pets, or putting their care in the will, is becoming more popular as people become more aware that it is possible,” says Jason Smolen, an estate attorney at SmolenPlevy in Vienna, Virginia. There are a few states that have enacted laws, such as Virginia and Maryland, that dictate how pet trusts are to be set up. With such a trust, the owner can outline how he or she would like the pet taken care of, how often it should be groomed, how the pet trust money should be spent, and any other special needs the pet might have, Smolen said.

Pet trusts can be set up for the lifespan of the animal, or in the case of longer-living pets such as parrots, some states cap them at 21 years. Owners should meet with the designated caretaker and trustees, and update their will whenever they unfortunately lose a pet or possibly gain one. Without a will or trust, pets in most states are treated like property, Smolen explained.

For more information, see here.

See Karen DeMasters, Putting Fido in the Will Not Just for Super-Rich, Financial Advisor, March 14, 2019.

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

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

March 16, 2019 in Books, Books - For Practitioners, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Friday, March 15, 2019

Article on Retirement Account Freebies: Taking Penalty-Free Withdrawals

IRABrent W. Nelson recently published an Article entitled, Retirement Account Freebies: Taking Penalty-Free Withdrawals, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is the introduction to the Article.

Americans across the political spectrum seem to agree that retirement is a worthwhile venture. The recent economic recovery caused historic gains in the United States markets, erasing recession-caused losses, though perhaps not recession caused pain. Under the current bull market environment, taxpayers may be more motivated and able to tap into retirement accounts to fund early retirements. Market volatility means that some taxpayers may find themselves in difficult financial circumstances in the future that might necessitate dipping into retirement accounts. In either case, the well-advised taxpayer may be able to withdraw money from his qualified retirement plan before age 59 1/2 and avoid paying the 10% tax on early withdrawal by qualifying for one of the many exceptions. Keeping those exceptions in mind is essential for the advisor to properly guide taxpayers contemplating an early withdrawal to a penalty-free goal. This article will guide the reader through those many rule, not all of which are widely understood among professional ranks.

March 15, 2019 in Articles, Current Affairs, Disability Planning - Health Care, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)