Wills, Trusts & Estates Prof Blog

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

Monday, October 14, 2019

Article on Charitable Tax Reform For the 21st Century

Charity1Roger Colinvaux & Ray D. Madoff recently published an Article entitled, Charitable Tax Reform For the 21st Century, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

The article identifies two goals of the charitable giving tax incentives: promoting actual charitable work and fostering a strong culture of charitable giving with broad participation. The recent increase to the standard deduction and the rise of donor-advised funds compromise both goals. The article outlines reform proposals to bolster the charitable sector, including expanding the giving incentive to all taxpayers in the form of a credit (subject to a giving floor), allowing some tax benefits to DAF donors upon contribution but delaying the income tax deduction until DAF funds are released from advisory privileges, closing loopholes that enable foundations and donors to skirt long-standing legal requirement, and modifying incentives to foundations to foster more spending.

October 14, 2019 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Sunday, October 13, 2019

Man gets ‘DNR’ Tattoo to Prevent Coming ‘Back as Vegetable’ in Case of Emergency

DNRNigel Thwaites, of Norfolk, England, is a 52-old-man that is healthy and has not faced a recent medical emergency. But after viewing a video that shows what can occur to a body after CPR, he decided to preemptively tattoo DNR (do not resuscitate) on his chest.

Thwaites said that the video showed what can happen if someone does not perform CPR correctly, and "that the brain becomes starved of oxygen which causes a loss of faculties in that person." He also is a registered organ donor, has a living will, and his blood type is also tattooed on his shoulder. Because a DNR tattoo creates legal and ethical issues for doctors in both the US and UK, the fact that Thwaites also has a living will is important to his choice.

Honoring the tattoo alone without a witness signature and patient signature could cause a doctor to lose his medical license, or be sued by the patient’s family or estate.

See Alexandra Hein, Man gets ‘DNR’ Tattoo to Prevent Coming ‘Back as Vegetable’ in Case of Emergency, Fox News, October 11, 2019.

October 13, 2019 in Current Affairs, Current Events, Estate Planning - Generally, Science | Permalink | Comments (0)

Thursday, October 10, 2019

What Family Businesses Need to Know About Gifting Business Interests

GiftGifting interests in a family business to members of the younger generation is a great tool in any estate planning arsenal.  But if that younger family member is married, it is understandable if a family as a whole would not want to have the ex-spouse as a business partner.

So what to do in this conundrum? Some parents may believe that a spousal consent form, signed by either the son-in-law or daughter-in-law, stating that in the case of a divorce, no portion of the business interest would not be transferred to them. But this could go south very quickly, either by opening a can of worms by offending the in-law or by the restriction being illegal in a particular state. Even if the stock is not considered part of the marital estate, the value of it may be, and thus the soon-to-be ex-family member could receive a higher percentage of the marital assets.

A better solution would be discussing with your own child about having a marital agreement such as a prenuptial or post-nuptial agreement. The family business may be better protected with the child having an agreement that states that the stock is outside the marital estate and not subject to division in the event of divorce. It also means that the value of the stock would also be off the table.

See Christine Fletcher, What Family Businesses Need to Know About Gifting Business Interests, Forbes, October 9, 2019.

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

October 10, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Trusts, Wills | Permalink | Comments (0)

Bride Incorporates Late Father's Ashes into Wedding Nails

Charlotte-Walton-1-CatersCharlotte Walton, of Staffordshire, England, was devastated when her beloved father, Mick, passed away from cancer a few months before her wedding. A week after his death she concocted an idea with her cousin, Kirsty Meakin, for her father to still be represented there.

Meakin is a popular nail artist who shares her tutorials online with 1.5 million YouTube followers, and the video she posted of her cousin's nails has now amassed 50,000 views. Meakin and Walton sifted through “tiny bits of bone fragments” in Mick’s ashes, picking out some of the pieces to be mixed in with clear coating used atop Walton wedding nails.

The final product had a unique, glittery aspect to the nails. “It was a unique thing to do but I loved it, I felt like he was able to walk me down the aisle, which I knew was something he really wanted to do," the bride said. After the wedding, Walton removed the fake nails and had them framed as a keepsake.

See Michael Bartiromo, Bride Incorporates Late Father's Ashes into Wedding Nails, Uses 'Tiny Bits of Bone Fragment' for Glittery Look, Fox News, October 8, 2019.

October 10, 2019 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, October 9, 2019

Financial Scams Targeting the Elderly Are Rising. Advisors Offer Precautions

ScamsScammers pull in billions of dollars every year by targeting the elderly, as much as $36.5 billion annually, and often the victims are too embarrassed and ashamed to mention it to their families. “One of the reasons parents don’t tell us when they may have fallen victim or come close is that they fear [their children will] pack up their home and they’ll lose their independence,” explains Ron Long, head of Wells Fargo’s Elder Client Initiatives Center of Excellence. 

Adult children should broach the subject of their parents' increased vulnerability and impulsiveness tactfully. Amy Nofziger, director of fraud victim support at AARP, says that children should adopt an attitude of non-judgement and empathy when approaching the conversation. Communication lines should remain open between parents and children so the dialogue can established before they are scammed, and then the adult child can bring up other kinds of security concerns. If the familial water are troubled, bring in a trusted intermediary such as a financial advisor or cleric.

Basic technology can be confusing to those who may have already passed middle age by the time cellphones and email had become commonplace. Offer to make sure their security software is up to date, including firewalls and encryption applications. Remind them not to carry their Social Security card in their wallets.

See Steve Garmhausen, Financial Scams Targeting the Elderly Are Rising. Advisors Offer Precautions, Barron's, October 3, 2019.

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

October 9, 2019 in Current Events, Elder Law, Estate Planning - Generally, Technology | Permalink | Comments (0)

Tuesday, October 8, 2019

California Legislature Cracks Down on Caregivers Who Marry Dependent Adults

AnnaCalifornia Governor Newsom signed Assembly Bill 328 on June 26, 2019 and will be effective on January 1, 2020, which hopes to close loopholes that allow scheming caregivers to marry the adults that are dependent on them. The Legislation creates a rebuttable presumption of undue influence in two scenarios: transfers to care custodians who Marry dependent adults and care custodians who make "omitted spouse" claims.

The Bill applies to “dependent adults,” who are defined as an adult of any age who cannot provide properly for his or her basic needs or who has difficulty managing his or her financial resources or resisting fraud or undue influence. If a donative transfer of property occurs or an instrument that does so is executed within six months of a caregiver marrying or cohabitating with a dependent adult, the caregiver must through clear and convincing evidence that there was no fraud or undue influence.

If there is no donative transfer or the newly minted spouse is not mentioned in the will, the caregiver was once allowed to claim an omitted spouse share of the decedent's estate. California law states that if a decedent does not update a will after a marriage, the omitted spouse is entitled to a third of the estate under California Probate Code section 21610 and section 21611. The Bill amends section 21611 so that care custodians who marry dependent adults cannot make “omitted spouse” claims if the dependent adult dies less than six months after the marriage occurred.

See Jeffrey S. Gavin, California Legislature Cracks Down on Caregivers Who Marry Dependent Adults, September 16, 2019.

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

October 8, 2019 in Current Events, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, New Legislation, Trusts, Wills | Permalink | Comments (0)

Estate Planning on Current Developments with Todd Angkatavanich and Steve Akers

BloombergTodd Angkatavanich and Steve Akers present what is hot in Estate Planning on Current Development on Bloomberg Tax Jumpstart, Part 1 and Part 2.

October 8, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Sunday, October 6, 2019

After Discovering he has at Least 17 kids, Man Sues Fertility Clinic

IVFDr. Bryce Cleary agreed to donate sperm while he was a student at Oregon Health & Science University after the clinic solicited him and fellow medical students for donations, even offering $40. But he said he did so under the acknowledgement that the clinic would not use it to create more than five children. 

But the doctor has now sued the University for $5.25 million after learning that his sperm was used to for more than 17 children, two of which have gone to the same schools and social events as the children he has with his wife. Dr. Cleary says he only began to learn of his numerous biological offspring in March of last year, when two of his biological daughters contacted him. The two women said they were able to identify him with the help of Ancestry.com as well as “specific and substantive information” from the clinic, according to the lawsuit. He then sent his DNA to the site and found that he was the father of 15 more children, three of which live in his home state of Oregon.

One of the woman that first reached out to Dr. Cleary, 25-year-old Allyson Allee, says that “It feels like OHSU really didn’t take into consideration the fact that they were creating humans. They were reckless with this, and it feels like it was just money and numbers to them."

See Beth Mole, After Discovering he has at Least 17 kids, Man Sues Fertility Clinic, Ars Technica, October 3, 2019.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

October 6, 2019 in Current Events, Estate Planning - Generally, Science | Permalink | Comments (0)

Friday, October 4, 2019

Why the Rich Need to Plan for a Tougher Estate Tax, Not a Wealth Tax

EstatetaxThe debate of how to resolve wealth inequality in the country is a hot topic, especially when it comes to the upcoming presidential election. Some candidates are pushing for an estate tax that will hit taxpayers at lower tax brackets, while others are of the belief that an annual wealth tax for citizens that are worth a certain amount per year would lower the disparity among income earners.

Both Bernie Sanders and Elizabeth Warren have put forth a potential wealth tax during their campaigns, but any new wealth tax would most certainly face constitutional challenge, and it probably wouldn’t raise the amount of revenue its supporters hope for. By contrast, an estate tax has been proven to bring in revenue to the Treasury. The exemption amount has been drastically scaled down recently, however, by the enactment of the Tax Cuts and Jobs Act by President Trump in 2017. At the moment only individuals that are worth more than $11.4 million at death are subject to the federal estate tax, while in 2000, the estate tax kicked in for an individual estate worth just $675,000.

Beth Kaufman, an estate lawyer with Caplin & Drysdale in Washington, D.C., says that “The exemption under the estate tax has risen astronomically. Probably by most measures, it’s too high.” Sanders' For the 99.8 Percent Act would bring the exemption rate down to $3.5 million for an individual. The rate the excess would be taxed at would be progressive; thus instead of taxing a flat rate of 40%, the amount from $3.5 million to $10 million would be taxed at 45%, 50% between $10 million and $50 million, 55% for the value in excess of $50 million and 77% over $1 billion.

See Ashlea Ebeling, Why the Rich Need to Plan for a Tougher Estate Tax, Not a Wealth Tax, Forbes, September 25, 2019.

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

October 4, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Tuesday, October 1, 2019

Why Today is the Most Important Day of the Year for College Students

FafsaToday marks the first day students can file the Free Application for Federal Student Aid (the FAFSA) and the College Scholarship Service Profile (the CSS Profile) for the 2020-21 academic year. Students and parents alike often comment that student debt is there biggest worry pertaining to college, so it is best to apply early, because financial aid can run out.

The FAFSA is free, and the CSS charges $25 for the first school and $16 for each school after that. The CSS is often utilized for private institutions and is the second most widely-used document to evaluate candidates for financial aid. The CSS is often more thorough and complex, so budget a couple hours to fill it out.

Three states are now mandating that high schools seniors apply for federal financial aid as a prerequisite for high school graduation: Texas, Louisiana, and Illinois, and the result has been record secondary education enrollment. California, Michigan, the District of Columbia, and Indiana are considering adopting the policy.

See Brian Boswell, Why Today is the Most Important Day of the Year for College Students, Forbes, October 1, 2019.

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

October 1, 2019 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)