Wills, Trusts & Estates Prof Blog

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

Monday, February 6, 2023

Social Security cost-of-living adjustments have fallen short of inflation by $1,054 since the start of pandemic

Estate planningNew data used to measure government inflations shows that average Social Security benefits fell short of inflation for the past two years. The Social Security Administration uses a measurement called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W to calculate the cost of living adjustment each year.

The average benefits fell short by about $1,054 from the start of the pandemic through 2022. This excludes Medicare Part B premiums. This is going to be difficult for people to recover from and will largely depend on how much inflation comes down. This serves as a reminder for retirees to carefully plan their income streams and not rely solely on Social Security.

For more information see Lori Konish “Social Security cost-of-living adjustments have fallen short of inflation by $1,054 since the start of pandemic”, CNBC, January 12, 2023.

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

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

Friday, February 3, 2023

ESG Investing After the DOL Rule on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights”

Estate planningLate last year, the Department of Labor under President Biden promulgated a new rule on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” superseding the Department’s 2020 rule. Reporting on the matter has suggested that the new Biden Rule encourages ESG investing, in contrast to the previous Trump Rule, which was reported as hostile towards ESG investing. These reports are incorrect.

Max M. Schanzenbach (Northwestern Pritzker School of Law) and Robert H. Sitkoff (Harvard Law School) have published a Summary of the Rule to clarify the effect of the new Rule and what exactly has changed since 2020.

For more information see Max M. Schanzenbach and Robert H. Sitkoff “ESG Investing After the DOL Rule on 'Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights’”, Harvard Law School Forum on Corporate Governance, February 2, 2023.

February 3, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, January 26, 2023

Wealth Tax Proposals Are Back as States Take Aim at Investment

TaxLawmakers from California, Connecticut, Hawaii, Illinois, Maryland, New York and Washington are coordinating efforts to introduce wealth tax legislation. This campaign is part of a broader national focus on taxing investments, entrepreneurship, and wealth.

The proposed legislation in New York would yield a nearly 30 percent tax on New York City’s wealthiest residents’ capital gains income. This would be about 50 percent higher than the 20 percent federal tax on long-term capital gains. 

Concerns have been raised in Washington, where a wealth tax is in conflict with the state constitution. However, this has not caused conflict for prior proposals and is not anticipated to cause issue with this current proposal.

Opponents to this legislation point out the difficulty in accurately measuring wealth, which creates perverse incentives and costly avoidance strategies. While some may say the wealthy can afford these taxes, opponents argue they cut deeply into investment returns which is a detriment to the economy, in addition to slowing innovation.

For more information see Jared Walczak “Wealth Tax Proposals Are Back as States Take Aim at Investment”, Tax Foundation, January 17, 2023.

Special thanks to Glen A. Yale (Yale Law Firm) for bringing this article to my attention.

January 26, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Sunday, January 8, 2023

Alzheimer’s Drug From Eisai, Biogen Gets FDA Accelerated Approval

AlzheimersLate last week, the U.S. Food and Drug Administration gave accelerated approval to the Alzheimer’s drug lecanemab, developed by Eisai Co. and Biogen Inc. The drug will be sold under the brand Leqembi and will run about $26,500 for a year's supply. 

Lecanemab aims to slow the advance of neurodegenerative disease by removing toxic protein beta amyloid from the brain. Eisai estimated that approximately 100,000 patients will be eligible for the drug within the next three years. "Our assumption is that the number of global patients eligible for the drug will grow to around 2.5 million by around 2030," Eisai CEO Haruo Naito told reporters.

The next step is to receive traditional FDA approval. Eisai officials plan to submit data from a recent successful clinical trial for full review.

For more information see Fiona Rutherford and Robert Langreth “Alzheimer’s Drug From Eisai, Biogen Gets FDA Accelerated Approval, Bloomberg, January 7, 2023.

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

January 8, 2023 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, December 29, 2022

Biden signs $1.7T government spending bill, big changes to the retirement system are included

CongressEarlier today, President Biden signed the omnibus spending bill into law, extending funds for the government into next year. The massive 4,155-page legislation includes a range of significant reforms aimed to help Americans save more for retirement.

Some measures include increasing the age for required minimum distributions from retirement plans to encouraging younger people save more earlier in life, and pushing businesses to get more employees enrolled in plans with automatic enrollment in retirement plans. The plan also includes a novel idea of treating student loans as deferrals for the purposes of retirement savings and a similar provision which could link retirement and emergency savings in the years ahead.

The legislation is a follow up to 2019’s SECURE Act, which represented the first major retirement legislation since 2006. However, it does not address the challenge of Social Security, which is projected to run out as early as 2034. 

For more information see Ben Werschkul “‘Big Changes to the Retirement System are included in Congress’s end-of-year bill’”, Yahoo! Finance, December 20, 2022 and Tal Axelrod “Biden signs $1.7T government spending bill, ensuring funding for most of 2023”, ABC News, December 29, 2022.

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

December 29, 2022 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, December 21, 2022

Top Massachusetts court rules against overturning law prohibiting physician-assisted suicide

DoctorsThe Supreme Judicial Court of Massachusetts ruled earlier this week that the commonwealth’s constitution does not support physician-assisted suicide. The Massachusetts Attorney General, Maura Healey, made a statement acknowledging the complexities of end of life care and believes that the Legislature is the appropriate body to take on the public policy issue. AG Healey has said she supports legislative action to allow medical aid in dying, so long as safeguards are put in place to protect patients and providers.

The state legislature has seen dozens of bills attempting to legalize physician-assisted suicide, however, none have succeeded. The court also noted that in 2012, voters saw a ballot measure that would have permitted terminally ill citizens to obtain a legal dose of drugs, but voters did not endorse the issue at that time.

The case has been moving through Massachusetts courts since 2016 when Dr. Roger Kligler, a retired physician with stage 4 prostate cancer, was joined by another physician to fight the idea that assisting terminally ill patients with ending their lives would result in manslaughter charges. Kligler was unhappy with the courts decision on Monday. “I will continue urging lawmakers to respect the bodily autonomy of dying Massachusetts residents by passing the End of Life Options Act," he said.

For more information see Jon Brown “Top Massachusetts court rules against overturning law prohibiting physician-assisted suicide”, Fox News, December 20, 2022.

December 21, 2022 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Friday, December 16, 2022

Canada offered assisted suicide to a Paralympian veteran who wanted a wheelchair lift installed

Estate planningChristine Gauthier, a 52-year old retired corporal who competed in the 2016 Paralympics at Rio de Janeiro, testified to the House of Commons Veterans Affairs committee last week about an incident that occurred when she sought services through the Veterans Affairs Canada.

Gauthier initially submitted a request to have a wheelchair lift installed in her home and was surprised to receive a letter from a VA case officer which instead offered to provide her with a medically-assisted suicide kit.

"I have a letter saying that if you’re so desperate, madam, we can offer you MAID, medical assistance in dying," Gauthier said in the hearing. Prime Minister Justin Trudeau has publicly condemned the incident after Gauthier personally wrote him a letter about the incident. Trudeau stated that protocols are being reviewed and changed to ensure that the VA is providing proper support to those who stepped up to serve their country.

For more information see Anders Hagstrom “Canada offered assisted suicide to a Paralympian veteran who wanted a wheelchair lift installed: report”, Fox News, December 4, 2022

December 16, 2022 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Monday, November 21, 2022

Article: Would the Enhancing American Retirement Now (EARN) Act Enhance Retirement Equity?

Albert Feuer (Law Offices of Albert Feuer) recently published an article entitled, Would the Enhancing American Retirement Now (EARN) Act Enhance Retirement Equity?, 50 Tax Management Compensation Planning Journal, 2022. Provided below is the abstract to the Article:

Congress is expected to agree upon major retirement legislation in the coming months. The EARN Act which was developed by the Senate Finance Committee, should be revised to better enhance retirement equity, particularly for the many American workers and their families who are seeking to accumulate sufficient savings to retire comfortably. Three major changes would help achieve this goal: (1) focus retirement incentives more quickly on those with inadequate retirement savings; (2) insure that those seeking to meet their reasonable retirement needs are the ones targeted for incentives; and (3) reduce the incentives for those with savings in excess of their reasonable retirement needs. Congress can and should do more to enhance retirement equity for American workers and their families.

November 21, 2022 in Articles, Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Friday, November 11, 2022

Canada expanding assisted suicide law to include the mentally ill, possibly enable 'mature minors'

Medical assistance in dying (MAID) has been available in Canada since 2016. In March 2023, it is set to expand after Bill C-7 received Royal Assent in 2021. Individuals seeking MAID will now have the opportunity to apply citing mental disorder as the sole basis. Previously, MAID eligibility was only open to those with “grievous and irremediable medical condition.” 

A controversial aspect of the expansion under this bill allows “mature minors” to seek this treatment without the consent of their parents. In Canada, the mature minor doctrine allows children who are sufficiently mature to make their own treatment decisions in some jurisdictions. Mature minors are between the ages of 12 and 16. Factors considered are age, maturity, intellect, life experience and the mental state of the minor when determining if they are capable of making their own medical decisions. 

In the United States, Oregon was the first state to approve medically assisted suicide in 1997. Since then, California, Colorado, Hawaii, Maine, New Jersey, New Mexico, Vermont, Washington state and Washington D.C. have followed suit. In the United States, a patient seeking this treatment must be at least eighteen years of age.

For more information see Ashley Carnahan “Canada expanding assisted suicide law to include the mentally ill, possibly enable ‘mature minors’”, Fox News, October 27, 2022 and “Medical assistance in dying”, Government of Canada and "Article 12 of the Convention on the Rights of the Child and Children's Participatory Rights in Canada", Department of Justice, Government of Canada.

November 11, 2022 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Monday, October 24, 2022

Markets or Regulators: Who Decides on ESG?

Estate planningEnvironmental, social and governance investing (ESG) has become controversial, with conflicting discourse around ESG investing. One conclusion is that fiduciary duty prohibits ESG investing, while the other is that it mandates ESG investing. 

The concept originated at the United Nations in 2005 as a follow up to Socially Responsible Investments (SRI) and calls upon investment professionals to understand the implications environmental, social, and governance factors of their investments. Regulators are partially to blame, as The Department of Labor under the Trump administration initially said that ESG investing violates fiduciary duty, while under the Biden administration the Department has all but said fiduciary duty requires ESG investing. The final rule is still pending.

Part of the confusion is regarding the semantics surrounding ESG investing. The first uses factors that can improve risk-adjusted returns, while the second is that ESG can starve “bad” firms of capital, providing benefits to third parties, which is essentially rebrand of SRI. The confusion this has created is not good for financial markets or investors, in particular, it complicates the management of nearly $40 trillion in retirement savings.

Traditionally, the Employee Retirement Income Security Act (ERISA) dictates that until an individual receives a distribution, the fiduciary managing the individual’s retirement savings must consider only expected risk and return. Using ESG factors to assess risk and return can be permissible investment for an ERISA fiduciary, but a fund that uses ESG factors to advance collateral benefits is not as ERISA prohibits investing for social impact. “A governmental push for or against ESG investing will create regulatory uncertainty while variously freezing in place strategies that may stop working or freezing out strategies that may be beneficial.”

For more information see Max Schanzenbach and Robert H. Sitkoff “Markets or Regulators: Who Decides on ESG?”, Barron’s Economy & Policy, October 20, 2022.

October 24, 2022 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)