Wills, Trusts & Estates Prof Blog

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

Sunday, November 25, 2018

Who Can Set Up the ABLE Account?

Gavel-simpleABLE accounts were Congress via the passage of the Achieving a Better Life Experience (ABLE) Act in 2014 and allow people with disabilities to save for disability-related expenses while maintaining eligibility for government benefit programs such as Social Security and Medicaid. A person can save up to $15,000 per year and a maximum of $100,000.

But who can open an account for the disabled person? Family members? The parents? Or in certain circumstances, the disabled person? ABLE accounts can be set up either by the account beneficiary (the person with disabilities), or that person’s parent, legal guardian or another person with power of attorney. If the beneficiary is opening an account, they must be 18 years or old and have the cognitive ability to understand what they are doing.

One big hindrance, however: the disability must have begun before the age of 26. This excludes many individuals that have become disabled later life, whether by a physical accident, medical condition, or neurological disease. Both houses of Congress have the ABLE Age Adjustment Act in front of them, which would increase the age of onset from 26 to 46.

See Who Can Set Up the ABLE Account?, ElderLawAnswers.com, November 12, 2018.

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

November 25, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)

Friday, November 23, 2018

Farm Succession Planning

FarmSuccessful family farms are often the pride of their owners, and they want to pass on the farm to other generations to form a legacy. Unfortunately, only 30% of family owned farms transfer effectively to the next generation. A clear and concise succession plan can alleviate many of these pitfalls, but the majority of farm owners do not go beyond creating a will.

Here are a few suggestions on how to make an effective succession plan for a farm.

  • Organize a team. Get together experts, estate planning attorneys and accountants to create a specialized plan for you and your family.
  • Consider incorporation. Becoming a formal legal entity can help ensure continuation of a business and also provide limited liability for its owners.
  • Train successors well. Training successors will help them love the farm just as you do, and the process can take years.
  • Document a vision. Help future generations understand future goals for the farm set by current owners
  • Develop a buy-sell or stock-restriction agreement. An agreement can obligate one owner to buy and another to sell his or her interest in the farm by a triggering even, just as a death or incapacity. It can also be structured to control how ownership interests may be transferred to non-family or off-farm family members
  • Have an insurance plan. Life insurance can provide needed liquidity when a triggering event such as death brings about sale of an ownership interest
  • Discuss plans with individuals involved. No need to surprise family members or others.
  • Review and update a plan periodically. Changes in laws or tax code may require adjustments to a plan, as well as changes in personal life and family situation also require a plan update.

See Amy E. Ebeling, Farm Succession Planning, Ruder Ware L.L.S.C., November 15, 2018.

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

November 23, 2018 in Current Events, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Monday, November 12, 2018

Discussing the Issue of Aging Parents

DinnerThe recent changes in the tax law may induce several families to bring up the uncomfortable topic of aging parents this holiday season. But these types of conversations can offset the possibility of any unpleasant surprises in the future.

The decision will ultimately be up to the parents, but even if children are to be the ones that bring up the subject, preparation and research should be done beforehand. Durable power of attorney, health care agent and executor are all positions that have certain responsibilities and requirements. Each one should be discussed with family members or close friends, or if those parties are not acceptable (or they decline), other arrangements should be considered.

A frank discussion of parental assets may make it easier for children to understand the overall planning objectives and decision-making process. An understanding of parental assets can also help with long and short term planning, ranging from tax strategies and charitable giving to options in the event of a long-term care illness. The increase in the standard deduction many people will no longer itemize deductions, and the increased federal estate tax exemption of $11,180,000 may make some charitable donations obsolete - for tax benefit purposes. Beneficiaries may also benefit from a step-up basis for highly appreciated assets, thus saving in capital-gains taxes.

See Kristin Shirahama, Discussing the Issue of Aging Parents, Financial Advisor, November 6, 2018.

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

November 12, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation, Wills | Permalink | Comments (0)

Saturday, November 10, 2018

Article on Testamentary Freedom and Family Protection in Scotland

ScotlandKenneth Reid recently published an Article entitled, Testamentary Freedom and Family Protection in Scotland, Wills, Trusts, & Estate Law eJournal (2018). Provided below is an abstract of the Article.

In a sense, testators in Scotland are free to do as they please, for a will is not challengeable on the ground of having failed to provide for children, or a spouse, or some other relative. Yet, regardless of what a will says or does not say, a child or spouse of the deceased is entitled to a fixed share of the deceased’s estate. Since 1964 this has been confined to the deceased’s movable estate and there is no claim in respect of immovable property. Where a deceased is survived by both spouse and children, the movable estate is divided into three – one-third for the spouse, one-third to be shared among the children, and one-third to be disposed of in accordance with the will. Where only a spouse, or only children, survive, the division is into two equal parts and not three. These ‘legal rights’ of the children and surviving spouse are personal rights against the executor of the deceased and are satisfied by payment in money.

This paper considers the history of legal rights in Scotland, their scope and calculation, the rules on discharge, the requirement to collate lifetime advances, and the requirement to choose between legal rights and an express bequest in the will.

Legal rights are of medieval origin, and have survived various attempts to change them. In recent years, the position of children has been seen as especially controversial. On one view, children should have merely a maintenance claim from the deceased’s estate, in cases of proved need. On another view, a child’s position in the family should continue to be recognised by means of a fixed share in their late parent’s estate. In the absence of consensus on this issue, the Scottish Government has recently rejected a package of reforms proposed by the Scottish Law Commission. Uncertain as to what the future should hold, Scotland has chosen to stick with rules developed, unthinkingly, in the distant past.

November 10, 2018 in Articles, Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, October 28, 2018

CLE on Using Trusts in Estate Planning and Asset Protection

CLEThe National Business Institute is holding a conference entitled, Using Trusts in Estate Planning and Asset Protection, on Wednesday, November 28, 2018 - Thursday, November 29, 2018 at the Embassy Suites by Hilton Boston at Logan Airport in Boston, Massachusetts. Provided below is a description of the event:

Program Description

Successfully Handle Your Client's Trust Needs

The wide array of trusts available, combined with the numerous issues clients can bring to the table, can make choosing and using the right tool a daunting task - but it doesn't have to be. This insightful, two-day seminar will guide you through how to effectively use trusts for estate planning and asset protection. Explore a variety of planning tools that will help you tailor a trust that fits your client's specific situation. Don't miss this opportunity to make sure your trusts are thoroughly on point - register today!

  • Find out how to select the best trust option for each unique situation.
  • Protect retirement accounts with the use of IRA trusts.
  • Use trusts to help clients qualify for Medicaid while protecting their assets.
  • Discover ways to structure special needs trusts so beneficiaries still qualify for public benefits.
  • Learn how to minimize your client's tax burdens with the use of defective trusts.
  • Properly handle the administration of a trust.
  • Clarify who your client is to avoid conflicts of interest and other ethical violations.

Who Should Attend

This basic-to-intermediate level seminar is designed for professionals involved in structuring and administering trusts:

  • Attorneys
  • Accountants and CPAs
  • Trust Officers
  • Tax Managers
  • Wealth Managers
  • Paralegals

Course Content

Day 1

  1. Trust Overview
  2. Determining Which Trust to Use
  3. Grantor Trusts: When and How to Use Them
  4. IRA Trusts: Protecting Retirement Accounts
  5. Using Trusts to Qualify for Medicaid
  6. Charitable Trusts: Setting Aside Assets and Tax Planning

Day 2

  1. Special Needs Trusts: Planning for Disabled Beneficiaries
  2. Asset Protection Focus: Analysis and Tools
  3. Using Irrevocable Life Insurance Trusts (ILITs)
  4. Tax Planning with Trusts
  5. Administering Trusts
  6. Making Changes to Trusts
  7. Remaining Ethically Compliant

October 28, 2018 in Conferences & CLE, Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

Saturday, October 20, 2018

CLE on Elder Law and Medicaid Planning: Everything You Need to Know

CLEThe National Business Institute is holding a 2- day conference entitled, Elder Law and Medicaid Planning: Everything You Need to Know, on December 4 - December 5, 2018 at the SpringHill Suites Pittsburgh Southside Works in Pittsburgh, Pennsylvania. Provided below is a description of the event.

Program Description

Everything You Need to Know to Represent Elderly Clients

Rising medical costs, health insurance changes, looming Social Security Fund depletion and baby boomers' retirement have intensified concerns over long-term care funding. Are you doing everything you can to help each client develop a comprehensive plan to ensure proper quality of life in the golden years? Join our expert faculty for two days of intensive study on planning and coordinating government benefits, and emerge better prepared to face the challenges of today's Medicaid and elder law practice. Register today!

  • Get two full days of estate planning training, so you can help clients protect assets and qualify for continuing care benefits.
  • Review medical and financial Medicaid eligibility criteria in detail.
  • Explore new continuing care options that allow for more independence.
  • Find new LTC funding sources to help clients maintain the quality of life they're used to.
  • Get solutions to real-life ethical dilemmas often faced in elder law practice.
  • Qualify eligible clients for veterans benefits and maintain your VA accreditation.
  • Plan for the tax consequences of asset transfers on spenddown requirement compliance.
  • Minimize Medicaid estate recovery through intricate understanding of the process.
  • Make better use of special needs trusts.

Who Should Attend

This basic-to-intermediate level, two-day seminar is designed for:

  • Attorneys
  • Estate and Financial Planners
  • Trust Officers
  • Paralegals
  • Accountants
  • Tax Professionals
  • Nursing Home Administrators

Course Content

DAY 1

  1. Long-Term Care Planning: Types, Cost, and Funding Options
  2. Tax Considerations
  3. Powers of Attorney
  4. Medical and End-of-Life Decisions
  5. Medicaid Benefits and Eligibility Rules
  6. Preserving Family Assets When Qualifying for Medicaid
  7. Medicaid Application Procedure and Tactics

DAY 2

  1. Obtaining Veterans Benefits
  2. Special Needs Trusts: Creation, Taxation, Administration
  3. Medicaid Post-Eligibility Issues
  4. Coordinating Benefits and Other Income Sources
  5. Liability/Litigation Issues in Elder Law
  6. Ethical Dilemmas

October 20, 2018 in Conferences & CLE, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Thursday, October 11, 2018

Avoid Probate Court: Head to Your Bank Instead [Texas]

BankProbate court is expensive and time intensive, and the majority of accounts have beneficiary designations that allow them to be transferred outside of probate. With a trust, more assets can be transferred outside of a courtroom. Financial institutions are called upon to help a customer determine what type of account to use and, after death of the customer, review legal documents and carry out the transfer instructions.

There are other tools that can be utilized to avoid a formal probate process, such as a small estates affidavit in Texas for estates that have less than $75,000 in assets (excluding the homestead). If there is a will and there are no unpaid debts or a need for administration, the will can be admitted to probate under a unique Texas proceeding known as a “muniment of title.” No administrator will be assigned and banks will be presented with a certified copy of of either a a small estates affidavit or an order admitting a will to probate as a muniment of title to pay out the funds in the accounts.

Power of attorney (POA) can also avoid the complex issue of a guardianship, and under a new state statute passed in 2017, POAs in Texas have expanded powers. Due to this, financial institutes also have a statutory obligations to report alleged fraud or abuse of the elderly to the proper authorities.

Employees of financial institutes are finding themselves in position to answer difficult questions and find harder solutions. They may find themselves in more of an advisor role. They may need to become more knowledgeable about statutory changes and new estate planning options, especially self-help tools, that are available to customers and train their personnel accordingly.

See David B. West, Avoid Probate Court: Head to Your Bank Instead, Lexology, October 4, 2018.

October 11, 2018 in Current Affairs, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, New Legislation, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Monday, October 8, 2018

Farmland Inheritance: Intentional Interference Judgement Upheld in Court

FarmOn July 18, 2018, in the case In the Matter of Estate of Lois B. Erickson the Iowa Court of Appeals affirmed a trial court finding of invalidity of a will based on undue influence and lack of testamentary capacity. They further held that one party was liable for tortious interference with a bequest.

Lois B. Erickson had three adult children: Wayne, who farmed, and Alan and Mary Ann who did not farm. The majority of their mother's estate consisted of farmland. Lois executed a will in 2010 that divided her estate equally among her three children. In 2011, however, a new will was drafted that gave the majority of the estate to Wayne. The other two children shortly afterwards pursued a guardianship for their mother. When Wayne learned of the impending guardianship hearing, he had his mother sign an amendment 2 days prior to the court hearing that anyone that contested the 2011 will would "reimburse my son, Wayne D. Erickson, at the rate of $1,500.00 per hour.” The physician who evaluated Lois for the guardianship hearing diagnosed her with “moderate to severe” Alzheimer’s.  The court thus ordered Alan to serve as his mother’s guardian.

The appellate court found the 2011 will was invalid based upon Wayne’s undue influence over his mother and the fact that Lois lacked testamentary capacity when she executed the will.  Regarding Lois’ testamentary capacity, the court cited Lois’ physician’s diagnosis of severe Alzheimer’s disease and the physician’s view that Lois could not make any major decisions on her own. As to undue influence, the court again cited Lois’ medical diagnosis.

The appellate court found that tortious interference does not mean the same thing as undue influence.  Tortious interference takes more:

The necessary proof in an action for intentional interference with a bequest or devise focuses on the fraud, duress, or other tortious means intentionally used by the alleged wrongdoer in depriving another from receiving from a third person an inheritance or gift.

On several occasions Wayne accused his siblings of stealing from his mother in an effort to have them disinherited. Every time the police were involved they found no evidence of theft.

See Holly M. Logan, Farmland Inheritance: Intentional Interference Judgement Upheld in Court, David Brown Law, September 4, 2018.

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

October 8, 2018 in Disability Planning - Property Management, Elder Law, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, September 27, 2018

Retirement Planning: Should an FLP be Dissolved Due to Changes in Estate Taxes?

FamilyThe increased estate tax exemption of 2018 to $11.8 million for married couples has caused the estimated number of estates that are will be liable for the tax to plummet to 1,500 from 5,000 in 2017, according to Forbes’ Ashlea Ebeling, sourcing the Joint Committee on Taxation. So what about wealthy families that may now be exempted from paying estate taxes that previously created a family limited partnership, or FLP?

It made sense to gift certain assets or property to FLPs years ago so that the tax burden to the estate would be lessened, but now the administrative costs and duties could seem too tedious. “This is a complicated area of the law, not for a practitioner new to FLPs,” explained tax attorney Marissa Dungey, partner with Withers Bergman LLP. “There are pitfalls if you move forward without proper advice.”

It’s not hard to dissolve an FLP. What’s hard is to consider all the consequences and plan for alternatives.

See Julie Jason, Retirement Planning: Should an FLP be Dissolved Due to Changes in Estate Taxes?, Tuscon.com, September 20, 2018.

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

September 27, 2018 in Current Affairs, Disability Planning - Property Management, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Sunday, September 23, 2018

5 Ways to Know you Need a Guardianship for Mom (or Dad)

GuardianshipMany adult children see that once their parents reach a certain age, their roles may reverse. The child may be taking care of the parent more and more. But when does the child know that it is time to take the drastic step of establishing a guardianship for their mom or dad? Here are 5 ways that may indicate their your beloved parent may need a court's intervention to protect them and their assets.

  1. Refusal to sign a power of attorney.
    • If your parent either refuses to sign anything in front of them, or you have the frightening feeling that they would sign anything in front of them, a guardianship may be necessary.
  2. Real property or investments have to be sold.
    • Depending on the laws of your state, you may have to have a guardian appointed in order to sell their home or other investments if you have been appointed with power of attorney.
  3. Disagreement over nursing home.
    • If you feel that your parent would be healthier (and safer) in a nursing home and they refused, you may need to petition to be named as guardian.
  4. Medical intervention beyond the health care proxy.
    • If your parent cannot give informed consent anymore because of dementia or Alzheimer's, being appointed as a guardian can give you the authority to authorize medical treatment and certain medications.
  5. Decision-making is compromised in some areas.
    • A limited guardianship may be the best course of action if your parent retains the ability to make decisions in certain areas of their life but not in others, such as financial or investment decisions.

See Christine Fletcher, 5 Ways to Know you Need a Guardianship for Mom (or Dad), Forbes, September 13, 2018.

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

September 23, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Guardianship | Permalink | Comments (0)