Wills, Trusts & Estates Prof Blog

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

Thursday, March 21, 2019

Article on Online Tools under RUFADAA: The Next Evolution in Estate Planning or a Flash in the Pan?

ToolsJustin H. Brown and Ross E. Bruch recently published an Article entitled, Online Tools under RUFADAA: The Next Evolution in Estate Planning or a Flash in the Pan?, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is an introduction to the Article.

Over the past five years, the estate planning process for digital assets has dramatically transformed. Much of this transformation is the result of the United Law Commission's introduction of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in September 2015, which a majority of US states and territories have adopted with some variations. RUFADAA, like its predecessor, UFADAA, was drafted with the intent to unify and clarify states laws with respect to a fiduciary's ability to access an individual's digital assets and electronic communications. However, unlike UFADAA, which presumed a decedent's consent for the decedent's personal representative to access her digital assets, RUFADAA places the burden on the decedent to provide express consent through the decedent's will or another mechanism. Under RUFADAA, an individual may use an "online tool," which is an account-specific feature that an online custodian (e.g., Apple, Google, Yahoo) may offer that enable its users to provide directions for disclosure or nondisclosure of digital assets to a designated person. Online tools are account-specific - in other words, using Google's online tool will not dictate how information held in the decedent's Apple account should be shared. Any assets that are not addressed with an online tool are subject to the terms of a testator's estate planning documents. When digital assets are not addressed by an online tool or an estate planning document, a providers terms of service agreement will dictate access and disclosure of a decedent's digital assets and electronic information.

March 21, 2019 in Articles, Current Events, Estate Administration, Estate Planning - Generally, New Legislation, Technology, Wills | Permalink | Comments (0)

Wednesday, March 20, 2019

Article on Estate Planning for Mary Jane and Other Marijuana Users

WeedGerry W. Beyer and Brooke Dacus recently published an Article entitled, Estate Planning for Mary Jane and Other Marijuana Users, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is the introduction of the Article.

An estate planner is more likely to encounter a client who regularly uses marijuana than a client who needs estate and gift tax planning, given that 55 million Americans are current users. Christopher Ingram, How Many Americans Regularly Use Pot: The Number Is, errr, Higher Than You Think, Wash. Post, April 20, 2018. At least 32 states and the District of Columbia currently exempt qualified users of medicinal marijuana from penalties imposed under state law. Additionally, ten states, Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington, and the District of Columbia authorize purely recreational use. See Legal Recreational Marijuana States and DC, ProCon.org (last visited Nov. 11, 2018). Accordingly, practitioners need to be aware of the interface between marijuana and estate planning.

This article provides a discussion of the major issues that arise in this context including: (1) impact of marijuana use on capacity; (2) interpretation of clauses conditioning benefits on the non-use of illegal drugs; (3) life insurance issues; and (4) marijuana-based assets in a decedent's estate or trust.

March 20, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Trusts, Wills | Permalink | Comments (0)

2 Ways to Combine Charitable Giving and Life Insurance

LifeinsuranceFinancial planning can be an ongoing process as life can be ever-changing. Sometimes having a life insurance policy can be the sole manner in which to preserve household wealth, while other times in can be more efficient to combine it with charitable giving.

If you no longer need a particular life insurance policy, you can simply give it away. You may donate it outright to a certain charity, or used a Donor Advised Fund (DAF). By changing the ownership, you can be done with it and may even be able to take a charitable income tax deduction for the value of the policy at the time of the gift. But there may be an issue of ongoing premiums, which would also shift to the charity. You can either continue to pay the premiums for the charity either to the charity itself or to the insurance company, or “you could convert the policy to a reduced and paid-up policy and donate it with no ongoing premiums needed," according to Dana Holt, CEO of HOLT Consulting.

You may also give a new life insurance policy to a charity, but the charity must have an insurable interest in the donor (you). If this is hard to manage, you could also name the charity as a beneficiary of the policy, either as a partial or full beneficiary, or to a trust that establishes the charity as the trust beneficiary to maintain more control over the funds.

See Jamie Hopkins, 2 Ways to Combine Charitable Giving and Life Insurance, Forbes, March 6, 2019.

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

March 20, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

CLE on Tax Treatment of Crytpocurrencies: What You Need to Know

CLEThe American Law Institute is holding a webcast entitled, Tax Treatment of Crytpocurrencies: What You Need to Know, on Friday, April 5th, 2019 from 1:00 - 2:00 p.m. Eastern. Provided below is a description of the event.

Why You Should Attend
There’s a lot of buzz surrounding cryptocurrency as digital currency platforms gain acceptance for business transactions. There’s also an equal amount of confusion around how to treat cryptocurrencies for federal income tax purposes. Although the IRS has offered some guidance treating some cryptocurrencies as property, the buying, selling, and trading of cryptocurrencies, such as Bitcoin, for investment can still raise a lot of questions. The increasing use of digital money has resulted in new ways to acquire and use cryptocurrency, which raises further challenges. Legal counsel, tax advisers, and compliance professionals must fully understand the tax obligations to meet these compliance challenges.

What You Will Learn
Even though the IRS classifies all cryptocurrencies as property, there is still widespread uncertainty over the more complex factors when determining tax liability. Join us for this 60-minute webcast that focuses on the taxable events of cryptocurrencies and compliant reporting issues, including:

• Virtual currency tax compliance issues
• IRS Notice 2014-21: What is and isn’t addressed
• Tax treatment of Forks and Airdrops
• Token offerings and SAFTs
• Reporting obligations

All registrants will receive a set of downloadable course materials to accompany the program.

Who Should Attend
This program is for any lawyer or accountant who is looking for a deeper understand of the tax obligations for cryptocurrencies.

March 20, 2019 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Technology | Permalink | Comments (0)

Monday, March 18, 2019

Article on Intervention to Prevent Abuse of Trust Structures [New Zealand]

TrustsNicola Peart published an Article entitled, Intervention to Prevent Abuse of Trust Structures, Wills, Trusts, & Estates Law eJournal (2010). Provided below is an abstract of the Article.

Trusts are very common in New Zealand, but they are increasingly detrimentally affecting the rights of creditors and spouses or partners when their relationship ends. This article examines the current statutory and common law remedies available to creditors and spouses or partners whose rights are defeated by trusts.It concludes that the existing law does not adequately protect such persons. The article considers options for reform and recommends that Parliament review the balance between socio-economic imperatives and the protection provided by the general principles of trust law.

March 18, 2019 in Articles, Estate Administration, Estate Planning - Generally, Travel, Trusts | Permalink | Comments (0)

Sunday, March 17, 2019

Article on Burying Contracts of the Dead

ContractWilliam A. Drennan recently published an Article entitled, Burying Contracts of the Dead, Probate and Property Magazine, Vol. 33 No. 2, March/April 2019. Provided below is the introduction to the Article.

Generally, contracts of the dead survive to haunt the living; the executor or other successor must perform the decedent's remaining contractual duties. A major exception is that personal service obligations dies at death. As a result, executors, their attorneys, and courts may need to decide if contractual obligations are personal or impersonal. Sometimes, performing a contact that appears to be impersonal would be economic senselessness for one or both sides. This may occur if the executor or other successor is unskilled at the business of the dead, or the deal simply makes no sense post-death for one or both sides.

This article highlights cases in which the decedent's remaining contractual duties appeared impersonal, but the court characterized those obligations as personal services or otherwise discharged the obligations. These precedents may help attorneys steer their clients from economic senselessness.

March 17, 2019 in Articles, Elder Law, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

High Court Should Affirm Kaestner State Trust Tax Case

CourtroomNorth Carolina’s Supreme Court held that the state cannot tax the income of a trust created and administered outside of North Carolina, even though the trust’s beneficiaries reside in North Carolina in Kimberly Rice Kaestner 1992 Family Trust v. North Carolina Department of Revenue. Now, the nation's higher court has agreed to hear the case.

The lower court founded its decision on two premises: that a trust is a separate entity from the beneficiaries - much like a corporation, and that the trust such as the one in the case lacked the required minimum contacts constitutionally required to be subject to taxation by the state. South Dakota v. Wayfair may have modified the minimum contacts requirement under the Commerce Clause, the due process analysis from Quill Corp. v. North Dakota remained the same. Because the state supreme court applied the proper analysis, the Supreme Court of the United States should affirm the decision.

“Purposeful availment” for minimum contact purposes pertains to the trust’s governance and the administration of its assets, not to trust communications with beneficiaries. Just because the beneficiaries reside in North Carolina does not give the state enough contact with the trust to tax the trust itself.

See Edward Zelinsky, High Court Should Affirm Kaestner State Trust Tax Case, Tax 360, March 5, 2019.

March 17, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Income Tax, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0)

Saturday, March 16, 2019

Article on Family Protection in the Law of Succession: The Policy Puzzle

PuzzleRichard Storrow recently published an Article entitled, Family Protection in the Law of Succession: The Policy Puzzle, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

To promote the protection of families, succession law diminishes the power of testation in a variety of ways that shield surviving spouses and children from disinheritance. The article conducts a survey of the law in fifty states, five main territories, and the District of Columbia and uncovers a remarkable diversity of family-protection provisions. Less apparent than the substance of the provisions themselves are the policies behind them. In a comprehensive study, this article concludes that family-protection provisions seek to prevent decedents from using their testamentary freedom in ways that impoverish those who are dependent upon them or that work unfairness against family members who have contributed in important ways to the accumulation of their wealth. In addition to these concerns is a notable ambivalence about the extent to which family protection statutes should undercut the expectations of those who have been promised a share of a decedent’s estate.

March 16, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Intestate Succession, New Legislation, Trusts, Wills | Permalink | Comments (0)

Putting Fido in the Will Not Just for Super-Rich

It is becoming more commonplace for people to consider their pets as part of their family, and as such more people are also including their dog, cat, or other furry loved on in their estate plans. And it is not just the wealthy, though those are the ones that garner the most attention and media. 

Pets“Setting up trusts for pets, or putting their care in the will, is becoming more popular as people become more aware that it is possible,” says Jason Smolen, an estate attorney at SmolenPlevy in Vienna, Virginia. There are a few states that have enacted laws, such as Virginia and Maryland, that dictate how pet trusts are to be set up. With such a trust, the owner can outline how he or she would like the pet taken care of, how often it should be groomed, how the pet trust money should be spent, and any other special needs the pet might have, Smolen said.

Pet trusts can be set up for the lifespan of the animal, or in the case of longer-living pets such as parrots, some states cap them at 21 years. Owners should meet with the designated caretaker and trustees, and update their will whenever they unfortunately lose a pet or possibly gain one. Without a will or trust, pets in most states are treated like property, Smolen explained.

For more information, see here.

See Karen DeMasters, Putting Fido in the Will Not Just for Super-Rich, Financial Advisor, March 14, 2019.

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

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

March 16, 2019 in Books, Books - For Practitioners, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Thursday, March 14, 2019

A Dying Man, a Typo and the Bitter Dispute Pitting 2 Nashville Religious Institutions Against 3 Children

Error4 non-profits, two of which are Nashville institutions, are fighting against three young children, claiming that they are the righting beneficiaries to land that has belonged in the family for more than 200 years. The acres were deeded to a Blackburn ancestor by President Andrew Jackson, prior to the War of 1812. But the lack of two words in a will of a Blackburn that passed away in 2014 has caused the organizations to believe that they deserve hundreds of acres now worth millions of dollars.

When Barry Blackburn, Sr., died at the age of 48 in 2014, his will left all of the land to his son Christopher in a lifetime trust, and then would pass to Christopher's children. If his son predeceased him, the land would go to his sister's three young children, aged 3, 8, and 13. If there were no surviving beneficiaries, the land would be divided equally among the Nashville Christian School, Harpeth Presbyterian Church (which was founded by Gideon Blackburn in 1811), the University of Mississippi law school and Boykin Spaniel Rescue. Christopher died a year after his father without begetting any children.

A Mississippi judged determined that the missing words, "or dies," amounted to a scrivener's error, and that the testator's intent had been to leave the land in the family. Evidence from Blackburn's assistants were introduced, including notes of conversations among them that showed his intent was for the charities to receive the land as a "last resort." The assistants claimed responsibility for the clerical error.

See Anita Wadhwani, A Dying Man, a Typo and the Bitter Dispute Pitting 2 Nashville Religious Institutions Against 3 Children, Tennessean, March 14, 2019.

Special thanks to Turney Berry (Wyatt, Tarrant, & Combs, LLP, Louisville, Kentucky) for bringing this article to my attention.

March 14, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Religion, Trusts, Wills | Permalink | Comments (1)