Wills, Trusts & Estates Prof Blog

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

Friday, April 9, 2021

The American College of Trust and Estate Counsel Releases Video on Increasing Diversity in the Legal Profession

Below is from an April 8, 2021 press release from the American College of Trust and Estate Counsel:

The American College of Trust and Estate Counsel (ACTEC) today released its video on the importance of improving recruitment and retention of diverse attorneys in the trust and estates field and the law in general, How to Increase Diversity in the Legal Profession. The video is the College’s fifth in its monthly informational series – Planning for a Diverse and Equitable Future, a project of ACTEC’s Diversity, Equity and Inclusivity Committee, funded by The ACTEC Foundation. 

Recognizing the lack of diversity in the legal profession, ACTEC’s Diversity, Equity and Inclusivity Committee addresses the issue in this video by highlighting the history of wealth disparity in the United States and the increasing need for attorneys of diverse backgrounds. Though the number of female lawyers has increased to 37 percent over the last ten years, similar gains have not been realized among people of color in the legal profession. Only 5 percent of attorneys are Black, even though they make up 13 percent of the population. Another 5 percent of attorneys are Latinx, though they represent 18.5 percent of the population.

Vanesa Browne of Bessemer Trust, ACTEC Fellow Stephanie Perry of Pasternak & Fidis, and Kalimah White of TD Wealth Management, offer concrete steps for creating a pipeline program and improving recruitment and retention. They describe the difference between serving as a mentor and serving as a sponsor and the importance of both roles in the career of a diverse attorney.  ACTEC Fellow Sarah Moore Johnson serves as the moderator for this forthright discussion.

“I am committed to serving as a mentor and sponsor for diverse attorneys in the trust and estates field,” said Terrence M. Franklin, Immediate Past Chair of the Diversity, Equity and Inclusivity Committee. “I was the first Black Fellow elected to ACTEC. I can attest to the importance of taking active steps to recruit and retain diverse attorneys into ACTEC, into the trust and estates field, and into the legal profession overall.” For further information about the Diversity, Equity & Inclusivity series, please visit actec.org/diversity. How to Increase Diversity in the Legal Profession can also be shared via YouTube

About The American College of Trust and Estate Counsel (ACTEC): Established in 1949, The American College of Trust and Estate Counsel (ACTEC) is a national, nonprofit association of approximately 2,500 lawyers and law professors from throughout the United States and abroad. ACTEC members (Fellows) are peer-elected on the basis of professional reputation and expertise in the preparation of wills and trusts, estate planning, probate, trust administration and related practice areas. The College’s mission includes the improvement and reform of probate, trust and tax laws and procedures and professional practice standards. ACTEC frequently offers technical comments with regard to legislation and regulations but does not take positions on matters of policy or political objectives.

About The ACTEC Foundation:  The ACTEC Foundation is the philanthropic arm of The American College of Trust and Estate Counsel or ACTEC. The Foundation is a nonprofit, 501(c)(3) that offers education to families and professionals and supports students interested in the trust and estate area of the law. Through continued financial support, The ACTEC Foundation offers professional development, scholarships and education for a number of important efforts, including legal education, educational support, public initiatives, legal publications and the student editorial board.

April 9, 2021 in Current Affairs, Writing Competitions for Students | Permalink | Comments (0)

Thursday, March 4, 2021

Disabled Recipients of Stimulus Aid Are Urged to Save Some in Special Accounts

DisabledPeople with disabilities are being encouraged to put away some of their stimulus aid in special accounts in order to keep their funds safe. 

These special accounts are called Achieving a Better Life Experience (ABLE) accounts. These types of special savings accounts were introduced in 2016 as a vehicle for people with disabilities to achieve "greater financial security and more independence." 

By using ABLE accounts, disabled people "can save money in the tax-favored accounts without risking the loss of need-based government benefits, like health insurance or supplemental income." 

As of now, 43 states and Washington D.C. offer ABLE. Although these special accounts have been around for a few years, interest in the accounts as grown exponentially due to federal pandemic relief putting more cash in people's hands. ABLE advocates have begun to "spread the word" about the usefulness of saving some or all of stimulus check funds in these special accounts. 

Here are a few incentives, or benefits, of taking advantage of ABLE accounts by placing stimulus aid funds in them. 

  • People with disabilities often struggle financially and rely on federal aid, and cannot qualify for Medicaid or Supplemental Security Income if they have more than $2,000 in savings or other assets. These accounts help low-income disable people avoid this detriment. 

 

  • Stimulus payments are not considered income, meaning you can spend the money how you please. However, if the money isn't spent within 12 months, it will be counted against asset limits and could disqualify disabled people from benefits. If this money is deposited in an ABLE account, it will not be considered when counting toward the $2,000 cap. 

 

  • Disabled people can also used the ABLE accounts to save towards an apartment or a wheelchair-accessible car, not to mention many other necessities. 

In general, despite the low popularity of ABLE accounts in the last few years, they are becoming more and more useful, especially during the pandemic. 

See Ann Carns, Disabled Recipients of Stimulus Aid Are Urged to Save Some in Special Accounts, N.Y. Times, February 26, 2021. 

Special thanks to Matthew Bogin, (Esq., Bogin Law) for bringing this article to my attention. 

March 4, 2021 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, March 3, 2021

Donald Trump's niece blasts his 'chutzpah' toward her fraud lawsuit

TrumpMary Trump, Donald Trump's estranged niece, has accused the former president of "trying to dodge accountability for defrauding her out of a multimillion dollar inheritance by claiming she took too long to sue." 

Mary Trump's lawyers brought the allegation in a New York State court. Mary Trump is suing the former president along with his sister Maryanne Trump Barry and his late brother Robert's estate. 

Mary Trump's lawyers wrote, The offensiveness of defendants' past conduct — stealing tens of millions of dollars from their own niece — is perhaps surpassed only by the chutzpah of their current arguments for dismissal." 

Mary's father, Fred Trump Jr., Donald Trump's older brother, died in 1981 and left Mary, who was 16 at the time a profitable real estate portfolio. 

Mary alleges that her aunt and uncles "siphoned" money away and "squeezed" her out of the family fortune. Mary Trump brought suit in September, close to two years after she says she learned of her families' actions, which she claims to have learned through an investigation into Donald Trump's finances. 

Mary Trump's lawyers claim that "[r]easonable diligence would not have uncovered the fraud [more than a decade earlier as the defendants contended]." 

Mary Trump has also written a tell-all entitled, "Too Much and Never Enough: How My Family Created the World's Most Dangerous Man" in which she delves further into her allegations against Donald Trump and other family members. 

Donald Trump's lawyers claim that Mary Trump is simply attempting to "cash in on the family name, and consume [Donald Trump] with lawsuits." 

See Jonathan Stempel, Donald Trump's niece blasts his 'chutzpah' toward her fraud lawsuit, Yahoo News, February 26, 2021. 

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

March 3, 2021 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Guardianship, New Cases | Permalink | Comments (0)

Monday, March 1, 2021

The 2020 Election and the Effect on Current Gift, Estate and Generation-Skipping Transfer Taxes

TaxDue to the election results and President Joe Biden taking Trump's position in the Oval Office, conversation continues to grow surrounding the area of taxes and estate planning. 

As many are aware of by now, Biden has brought forth a few proposals that will greatly impact estate planning for Americans. 

Gift tax, estate tax and generation-skipping transfer are among federal taxes that would be affected if Biden's proposals took effect.

"The gift tax (which applies to lifetime transfers) and estate tax (which applies to transfers at death) are “unified,” meaning that a single rate schedule applies to both taxes and there is a single “exemption” amount that each individual may transfer during life or at death without paying gift or estate taxes. The GST tax is an additional tax imposed on certain transfers made to persons more than one generation below the donor. The GST tax applies to transfers during life and to transfers at and after death." 

Under current law, gift, estate, and GST exemptions are currently at $11.7 million. These rates are expected to "sunset" on January 1, 2026. However, if Biden's proposals are adopted and implemented, the rates could return back to $5 million before 2026. 

Although it is not clear what changes will be adopted or made in the tax arena, it is important to stay updated and informed of what is going on. 

Some things to consider: 

  • Retroactivity and risk 
  • Disclaimer
  • Marital deduction
  • Loans and forgiveness 

See Daniel R. Donovan & Beth Abraham, The 2020 Election and the Effect on Current Gift, Estate and Generation-Skipping Transfer Taxes, Faegre Drinker, February 22, 2021.  

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

March 1, 2021 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax | Permalink | Comments (0)

Wednesday, January 27, 2021

Trusts and Estates 2021 Tax Update

TaxWith the combination of the new president, Joe Biden, and the rebalancing of the House and Senate, it may be necessary to prepare for tax changes. During his campaign las year, Joe Biden announced a tax plan that "would decrease he federal estate tax exemption from the current amount of $11.7 million to $3.5 million. In addition, Biden’s tax plan, if implemented, would raise the individual income, capital gains, and payroll taxes for individuals with high levels of income. The changes to the capital gains tax would appear to be the most significant." 

The Tax Cuts and Jobs Act (TCJA) doubled the estate, gift and generation skipping transfer tax exemption to $10 million ($11.7 million adjusted for inflation) set to run from 2018 until 2025. However, with President Biden's tax plan, the exemption amount would be reduced to $5 million before the set date of the end of 2025. It is possible that the rate goes as low as $3.5 million, the amount the rate was in 2009. 

It may be necessary to take a look at your estate plan as these changes could have a big effect. You may want figure out what gifts are linked to the amount of exemption and use the exemption before it is reduced.

If you believe that these changes will or could affect you, it is imperative that you visit with an estate planner to review your financial situation and the implications of the potential tax changes.

See Trusts and Estates 2021 Tax Update, Downs, Rachlin, Martin PLLC, January 22, 2021. 

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

January 27, 2021 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Millennials Embrace Prenups—but Through a Very Different Lens Than in the Past

Prenup Prior to the millennial takeover, prenups usually came up with young adults from wealthy families or couples entering marriages after a prior divorce(s). Now young adults of all income levels are using them for reasons apart from protecting accumulated assets. Due to the modern societal realities, there are more reasons to use prenuptial agreements. For example, the desire to keep debts separate, social-media use, embryo ownership, pet care and more. 

According to experts, one reason for the increase in use of prenups with millennial may be the fact that many of them are children of divorced parents and have seen the financial impact divorce carries. Further, the conversations surrounding money and finances before marriage is not nearly as uncomfortable or dreadful as it once was. 

Jacqueline Harounian, a partner with the law firm Wisselman, Harounian & Associates, stated, “You’re effectively negotiating your divorce agreement in advance in a way that’s more egalitarian than before.”

Some couples may use prenups to maintain separation of their finances in order to circumvent state laws that would combine their assets into marital property. Millennial also use prenups to address alimony provisions and debt issues. 

See Cheryl Winokur Munk, Millennials Embrace Prenups—but Through a Very Different Lens Than in the Past, Wall Street Journal, January 21, 2021. 

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

January 27, 2021 in Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 26, 2021

Keep Calm and Plan On: Estate & Gift Changes Ahead

TaxAs of now, the federal unified estate and gift tax exemption amount is $11.7 million per person. The exemption rate is set to automatically revert to approximately $6 million on January 1, 2026. 

However, President Joe Biden has brought forth a new proposal which could lower the exemption before 2026. When conversation began about this new proposal, many people felt more comfortable because the rebalancing of the House and Senate appeared to be a long shot. However, now that the rebalancing has occurred, the proposal will likely have more support than originally believed.

"Policy commentators speculate on possible exemption amounts as high as $6 million and as low as $3 million, and even surmise that there could be an end to the unified credit, resulting in a $3.5 million exemption from estate tax and a $1 million exemption from gift tax. . ." 

Another possible change will be elimination of the "step up" at death. There is also some speculation that the tax changes could be retroactive at the beginning of the year enacted. 

It is important to know that, as of now, these projections are merely conjecture. However, it is important, and perhaps necessary, to consider how these changes may effect you or your clients estate plans. 

See Keep Calm and Plan On: Estate & Gift Changes Ahead, Pierce Atwood L.L.P., January 20, 2021. 

January 26, 2021 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Sunday, January 24, 2021

Estate Planning for Retirement Benefits after the SECURE Act

Richard L. Kaplan recently published an article entitled, Estate Planning for Retirement Benefits after the SECURE Act, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Estate planning

This brief essay examines one of the most significant intersections of Elder Law and Trusts & Estates – namely, distributions from defined contribution retirement plans after the participant dies. Particular attention is paid to recently enacted statutory changes, including the end of so-called “stretch IRAs,” which allowed non-spouse beneficiaries to spread withdrawals from inherited retirement accounts over their lifetimes. This essay also addresses strategic considerations in designating beneficiaries for such accounts.

January 24, 2021 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, January 21, 2021

So Many Have Died: COVID-19 in America's Nursing Homes

COVIDAs of late September 2020, 77,000 residents and staff of long-term care facilities have died of COVID-19 with adults 65 and older accounting for 79 percent of COVID-19 deaths in the United States. This number is exceptionally troublesome given the fact that the age group only accounts for 15.2 percent of the population.  

Why so many deaths? 

Well, the residents in nursing homes are much older and more fragile, leaving their immune systems more susceptible. Further, "the top three underlying conditions for those hospitalized with COVID-19 (heart disease, chronic lung disease, and diabetes) rise with age, posing a greater risk to those is nursing homes and similar facilities.

The high infection rate results from a combination of factors which are shown below:

  • Problems with high infection control in nursing homes, a long-time issue that the pandemic has exacerbated.  
  • Chronic lack of personal protection equipment (PPE) 
  • Failure to separate COVID-19 cases from non-covid residents 
  • Nursing home designs that make it easy for infections to spread
  • Staffing shortages made worse by the pandemic, and
  • Inadequate testing 

From a practical standpoint, in order to control the increasing death rate and lower the COVID-19 cases in nursing homes, these issues will need to be addressed.

See David English, So Many Have Died: COVID-19 in America's Nursing Homes , ABA: Probate & Property, Jan/Feb 2021. 

January 21, 2021 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 19, 2021

State Death Tax Hikes Loom: Where Not To Die In 2021

TaxDue to the economic hardships many states are facing in the wake of the pandemic, many are looking to find revenue from death taxes. 

The District of Columbia has already put an estate tax levy in place that went into effect on January 1, 2021. The "Estate Tax Adjustment Act" reduced the exemption from $5.67 million in 2020 to $4 million for individuals who died on or after January 1, 2021. For reference, "a resident dying in 2021 with a taxable estate of $10 million would owe nearly $1 million in estate tax to D.C." 

Seventeen other states have imposed their own estate or inheritance taxes that are separate from the federal estate tax. As of now, the estate tax exemption is $11.58 million per person, but is set to drop back down to $5 million per person (adjusted for inflation). 

Conversation has developed over President-elect Joseph Biden's tax plan proposal which calls for the federal estate tax to go back down to $3.5 million per person, which was the level in 2009. 

The revenue from these taxes could possibly be used to help rebuild the country and repair the damage done by the pandemic. 

See Ashlea Ebeling, State Death Tax Hikes Loom: Where Not To Die In 2021, Forbes, January 15, 2021. 

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

January 19, 2021 in Current Affairs, Current Events, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)