Wills, Trusts & Estates Prof Blog

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

Sunday, January 3, 2021

President signs year-end funding, COVID-19 relief legislation; tax provisions are enacted

TaxOn December 27, President Trump signed the Consolidated Appropriations Act, 2021." The legislation includes "over $900 billion fo coronavirus (COVID-19) relief programs, government funding of $1.4 trillion, and myriad tax provisions." 

The legislation includes a tax provision that will allow recipients of Paycheck Protection Program (PPP) loans to deduct related costs. The CARES act will also be extended as well as expanded. 

Tax measures that will result from the new legislation includes:

COVID-Related Tax Relief Act

  • Extension time for repayment
  • Additional 2020 Recovery Rebates
  • Clarification that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income from forgiveness of PPP loans
  • Allowance of an election regarding the tax treatment of certain farming losses for 2018, 2019, and 2020
  • and more

There will always be permanent extensions of temporary provisions and long-term extensions of temporary provisions. Also included will be short-term extensions of temporary provisions. 

There are also numerous miscellaneous tax provisions that include: 

  • Modifications to the low-income housing tax credit rate, including a new minimum rate of 4% for certain buildings
  • Depreciation of certain residential rental property over 30-year period, allowing for the use of 30-year ADS depreciation for residential real property placed in service prior to January 1, 2018, held by an electing real property trade or business in certain circumstances
  • Expansion of current section 48 energy credit to include waste “energy recovery property”
  • Extension of current section 48 energy credit for offshore wind facilities to January 1, 2026
  • Minimum rate of interest for certain determinations related to life insurance contracts
  • Retirement provisions
    • Modification to minimum age for distributions during working retirement
    • Temporary rule preventing partial plan termination
  • Employee retention credit (ERC) and rehiring tax credit
    • Clarifications and technical improvements to the CARES Act employee retention credit, including a clarification regarding the definition of “gross receipts,” a modification to the treatment of health plan expenses, and improved coordination with the PPP
    • Extension of the ERC to July 1, 2021, and expansions including increase in the credit percentage from 50% to 70%, increased per employee limitation, and modifications to the definition of eligible employer
  • Business meals deduction—a temporary allowance of a full deduction for business meals paid or incurred between December 31, 2020, and January 1, 2023
  • Earned income tax credit and child tax credit—a temporary special rule for determination of earned income
  • Charitable contributions
    • Extension of the CARES Act non-itemizer charitable contribution deduction for certain contributions through 2021
    • Extension of the CARES Act modification of donor percentage-of-income limitations for certain charitable contributions through 2021
    • For corporations, a temporary suspension of limitations on the deduction for charitable contributions associated with qualified disaster relief made from January 2020 through late February 2021
  • Health and dependent care flexible spending arrangements, temporary special rules for health and dependent care flexible spending accounts with unused balances
  • Life insurance—reduce the required interest rates used to determine if a policy meets the definition of life insurance for federal tax purposes

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention. 

January 3, 2021 in Current Affairs, Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Legislation | Permalink | Comments (0)

Saturday, January 2, 2021

Philanthropists Push for Charitable Giving Reforms

CharityIn order to increase the amount of money available for nonprofits, a group of high-profile philanthropists have been working together with estate and gift tax experts to push for reforms in charitable giving laws. 

The objective is to "unlock some of the US $1 trillion sitting in private foundations and DAFs that is not obligated to be distributed to nonprofits under current law." Basically, they want the money to be accessible to working charities so they can work. 

According to Ray Madoff, a professor of estate and gift tax estate planning at Boston College, "The government shouldn't be subsidizing putting money aside where it might or might not be spent for the benefit of society." 

Madoff also stated that private foundations are obligated only to pay out 5% of their assets to public charities annually, with the foundation being able to put the rest to place of its choosing. 

With Donor Advised Funds (DAFs), individuals are allowed to make donations into an investment fund managed by a public nonprofit. However, the funds are not required to be distributed to a public charity because the DAF is managed by one.

According to Madoff, these "tax-advantage vehicles" are not producing many benefits for society. One reason for this is that the law cannot keep up with the ever-growing DAF investments. Another issue is that private foundations can meet their annual 5% payout by distributing funds to a DAF instead of operating a charity. 

The philanthropist groups are proposing that Congress—with the help of Joe Biden—engage in "emergency charitable stimulus" legislation that raises the required annual payout rate to 10%. 

See Abby Schultz, Philanthropists Push for Charitable Giving Reforms, Barrons, December 23, 2020. 

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

January 2, 2021 in Current Affairs, Current Events, Estate Planning - Generally, Gift Tax, New Legislation | Permalink | Comments (1)

Friday, January 1, 2021

What Will Become of a Tycoon’s Art Gems?

Art"It’s the art world’s new guessing game: Will Sheldon Solow’s paintings and sculptures, conservatively valued at $500 million, be heading to a private museum or to auction?"

Sheldon Solow, a real estate tycoon who pasted away in November at the age of 92 had one of the finest 20th-century art collections around. Following his death, the fate of the art collection has yet to be confirmed. 

Solow has been known to participate in art auctions in which he both sold and bought masterpieces. Solow's collection has been valued around $500 million and would mean a lot to the art community given the short supply in the wake of the pandemic. 

The art community is on the edge of their seats, as they know how important the decision is for the art world. 

Solow's family has contemplated opening an art museum, which would allow the public to view the valuable art collection. According to Mia Fonssagrives Solow (Sheldon's widow), they are not concerned with comparing themselves to the Metropolitan. 

The fate of the art collection remains unclear, but there is no doubt that the art world will be anxiously awaiting the final decision. 

See Katya Kazakina, What Will Become of a Tycoon’s Art Gems?, NY Times, December 20, 2020. 

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

January 1, 2021 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

There’s a Way Biden Can Raise More From the Rich Without Higher Taxes

Wealth taxJoe Biden has offered a proposed tax plan that would apply higher taxes on Americans that make more than $400,000 a year. Joe Biden believes that the tax increases would reduce inequality among other things. 

However, if the Republican party comes out on top in the Georgia runoff elections, Biden will have a hard time succeeding with his tax proposal. The Republican Party has been clear that they are against tax increases. 

If this is the case, Joe Biden may have another option: be more swift in enforcing the current tax laws. 

According to the New York Times, "Tax experts have long identified a large “tax gap” between the amount Americans owe and what is actually collected. This is disproportionately a result of underpayment of taxes by high earners, especially in certain types of closely held partnerships and midsize businesses that face little scrutiny from either the Internal Revenue Service or outside investors." 

With changes in the IRS's budget, rich people have received less attention, which has allowed them to get away with "questionable or illegal" tax strategies. If the IRS's budget were to big enough to allow them to go after the rich and keep tabs on the poor, a large tax increase may not be necessary. Instead, the focus would be on holding the rich accountable for following the tax laws and using legal tax strategies. 

See Neil Irwin, There’s a Way Biden Can Raise More From the Rich Without Higher Taxes, The New York Times, December 22, 2020. 

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

January 1, 2021 in Current Affairs, Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (1)

Thursday, December 31, 2020

Covid Spurs Families to Shun Nursing Homes, a Shift That Appears Long Lasting

Estate planningIn the wake of the pandemic, Americans are having to take extra, and often new steps to take care of their elderly. These new family decisions include avoiding nursing homes and other rehabilitation homes for the elderly, leaving Americans to care for their loved ones in their own homes. 

America has a long history of using institutions to care for the at-risk elderly. "The U.S. has the largest number of nursing-home residents in the world. But families and some doctors have been reluctant to send patients to such facilities, fearing infection and isolation in places ravaged by Covid-19, which has caused more than 115,000 deaths linked to U.S. long-term-care institutions."

Since the spring, there has been a drop of in the number of patients in nursing homes and similar facilities. "Occupancy in U.S. nursing homes is down by 15%, or more than 195,000 residents, since the end of 2019, driven both by deaths and by the fall in admissions." 

This has created financial problems for nursing-homes, with even the biggest U.S. nursing-home company stating that it may not have the money to fulfill its financial obligations. 

See Anna Wilde Mathews & Tom McGinty, Covid Spurs Families to Shun Nursing Homes, a Shift That Appears Long Lasting, Wall Street Journal, December 21, 2020. 

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


December 31, 2020 in Current Affairs, Current Events, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Friday, December 25, 2020

The GAO Reviews QDROs

The Government Accountability Office (GAO) prepared a report for the Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions about Qualified Domestic Relations Orders (QDROs). The report on QDROs was prepared in July 2020. 

"QDROs are court-issued orders that allow a divorced spouse (or in rare cases a child) to receive a portion of a participant’s qualified retirement plan benefit. A QDRO is one of the few ways in which a participant’s qualified retirement benefit can be assigned or alienated." 

The report contained two key findings to encourage the Department of Labor to: 


  • Find ways to collect data on the fees that defined contribution plans charge to participants or alternate payees for reviewing QDROs
  • Improve divorcing parties’ access to information about the QDRO process.


It may be necessary for you to review your current plan to see what the current fee your plan charges for a QDRO. 

See The GAO Reviews QDROs, Faegre Drinker, November 12, 2020. 

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

December 25, 2020 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Modern death: new ways of paying tribute

Estate planningThere are many ways to pay tribute to those who pass, and the traditions vary throughout cultures. From ordinary funerals to pyramids and mausoleums, memorials have varied for centuries. One thing that has remained the same: when people are important to you, the monuments will be elaborate and meaningful. 

As the pandemic continues to plague the world, memorials have been a bit different. The wealthy have not been able to memorialize their loved ones in the same elaborate ways. Thus, wealthy memorials—and others—have changed drastically. "The emphasis is also shifting from the physical construction to the experience, at least for the mourners left behind. Memorials are still elaborate but in a very different way."

According to Kevin Toolis, the wealthy have always spent more on death events. However, with environmental concerns and religious traditions, memorials have continued to evolve. 

Toolis stated, "In 2020, the coronavirus pandemic has made people, particularly in the west, even more afraid of death, exacerbated by the fear of dying alone, and with bodies regarded as biologically contaminated." 

Either way, memorialization has remained a tradition and a ritual for the living. 

See Helen Barrett, Modern death: new ways of paying tribute, Financial Times, November 23, 2020. 

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

December 25, 2020 in Current Affairs, Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (1)

Monday, December 21, 2020

Webinar: Understanding the IRA Distribution Rules under the Secure Act: Includes Practitioner Issues and IRS Compliance Issues

A webinar program entitled, Understanding the IRA Distribution Rules under the Secure Act: Includes Practitioner Issues and IRS Compliance Issues will be held on December 30, 2020 from 1:00 PM ET to 2:30 PM EST. You can register by clicking on the link above. Provided below is more information on the program. Estate planning

Many taxpayers have accumulated a considerable amount of assets in their retirement accounts. These assets may be in their 401(k), another type of qualified plan, a 403(b) arrangement, a 457 governmental plan, a traditional IRA and a Roth IRA. Estate and income tax planning are more important than ever, especially under the Secure Act, when advising a client that has substantial retirement type assets. This program covers many of the rules that you need to know when implementing an estate plan for the client that has substantial retirement assets. IRS Compliance is now a major issue in retirement distribution planning for IRA owners and IRA beneficiaries. 

The Secure Act has many deadline rules that have to be tracked in order to avoid IRS penalties. You must become familiar with these deadlines. In addition, unintended beneficiaries of retirement accounts must be avoided. In his exclusive LISI Webinar, Seymour Goldberg will review the following topics:

  • Common errors in retirement distribution planning
  • Roth IRA taxing issues: Failure to list basis of Roth IRA account on Schedule A of Form 8971 (no exception provided for under the proposed regulations)
  • Why many beneficiary forms are defective
  • Unintended beneficiaries of retirement accounts
  • Customized sample beneficiary forms
  • Advantages of a Trust as the beneficiary of an IRA
  • Disadvantages of a Trust as the beneficiary of an IRA
  • Statute of limitation issues involving IRA penalties
  • Comment letter to IRS and Treasury regarding post-death Roth IRA distributions to trusts. Comment letter discusses lack of adequate disclosure that may trigger an IRS examination of the trust return
  • And much more

SEYMOUR GOLDBERG, CPA, MBA (Taxation), JD, is a senior partner in the law firm of Goldberg & Goldberg, P.C., Melville, New York. Professor Emeritus of Law and Taxation at Long Island University. Former Director of the Tax Institute of the C.W. Post Campus of Long Island University. Recipient of the American Jurisprudence Award in Federal Estate and Gift Taxation from St. John’s University School of Law. CLE instructor for many professional organizations including the New York State Bar Association, American Bar Association, NJICLE, City Bar Center for CLE, local bar associations and law schools. Mr. Goldberg is admitted to practice law in New York State. Authored 4 manuals for the American Bar Association on IRAs and on Trusts. His American Bar Association manual entitled “Can You Trust Your Trust” can be found on Amazon. Mr. Goldberg handles probate matters, tax disputes with the IRS and the IRS appeals office, IRA penalty waivers and New York State Department of Taxation tax disputes. Represents clients in IRS ruling requests (over 75). Wrote an amicus brief in the 2014 inherited IRA Supreme Court Case, Clark v. Rameker. His manuals for the American Bar Association can be found in over 100 law school libraries throughout the United States. He is a member of the Relations with the IRS Committee of the New York State Society of Certified Public Accountants. He was formerly associated with the Internal Revenue Service. Mr. Goldberg has conducted continuing education courses with the IRS on the retirement distribution rules. He has recommended corrections to IRS Publication 590 working pro bono with the IRS and then Congressman Steve Israel. This resulted in IRS revisions and the adoption of IRS Publication 590-A and IRS Publication 590-B. He is the recipient of Outstanding Discussion Leader Awards from both the AICPA and the Foundation for Accounting Education. He has conducted well over 300 CPE programs in the field of taxation including over 100 CPE programs involving IRAs and IRA Compliance issues. Mr. Goldberg has been quoted in the New York Times, Forbes, Fortune, Money Magazine, U.S. News & World Report, Business Week and the Wall Street Journal. He has also been interviewed on CNN, CNBC and WCBS. 

December 21, 2020 in Conferences & CLE, Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, December 17, 2020

Britney Spears' father speaks out as she requests to remove him as conservator of her estate

SpearsBritney Spears' conservatorship battle continues as the legal proceedings continue to become more public. At the beginning, the legal proceedings were fairly private, but after a dramatic hearing last month, the topic caught the attention of the public's wandering eye. 

Apparently, Spears was afraid of her father, Jamie Spears, and accused him of making business decisions behind her back. "According to court documents obtained by CNN, Ingham said the pop star would not perform again as long as her father remains in control of her estimated $60 million estate." 

Jamie Spears has claimed that anything he has done has been to protect his daughter from "those with self-serving interests." Jamie Spears was court-appointed in 2008 after a series of personal issues came to light. Most of his decisions have been confined to health and medical decisions. 

In January of 2019, Britney Spears decided to take a break from work and entered into a 30-day voluntary residential treatment facility. 

After Jamie Spears began to experience some health issues of his own, Jodie Montgomery was appointed by the court to oversee the estate. In August of this year, Spears and her attorney filed to remove Jamie Spears as conservator. According to Jamie Spears, he was on good terms with his daughter until then. 

Ingham, Spears' attorney, claimed that Jamie Spears lacked transparency. However, Jamie Spears believes that Ingham is the reason he has not spoken to his daughter since August and many things are being exaggerated as Jamie says he only has his daughter's best interest in mind. 

Tensions continue to rise as litigation is pending. 

See Chloe Melas, Britney Spears' father speaks out as she requests to remove him as conservator of her estate, CNN Entertainment, December 15, 2020. 

December 17, 2020 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Wednesday, December 16, 2020

More Than 100 Accusers Seek Restitution From Jeffrey Epstein’s Estate

"A victim compensation fund has already paid out millions of dollars, with more claims expected to be approved in the coming weeks." 

The victim compensation fund was set up to compensate victims of Jeffrey Epstein's sexual exploitation. The fund has already received more than 100 claims and paid out tens of millions of dollars. 

Apparently, this high number of claims has already exceeded the expectations. However, the fund is still continuing to accept requests until the end of March. Jordana Feldman, administrator for the fund, did not say how many claims have been paid out, but someone familiar with the fund stated that over $30 million has been paid to accusers thus far. 

The fund has been taking claims since July, a little less than a year after Epstein was found dead in his jail cell following his arrest on federal sex-trafficking charges. Epstein had put nearly $600 million into a trust, which caused many to fear that his victims would not see just compensation for years to come. 

However, the estate's executors agreed to establish the fund, opening a door for accuser's to seek compensation, even though whom had already settled with Epstein following his 2008 conviction. 

See Matthew Goldstein, More Than 100 Accusers Seek Restitution From Jeffrey Epstein’s Estate, N.Y. Times, December 8, 2020. 

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

December 16, 2020 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)