Wills, Trusts & Estates Prof Blog

Searching for Solutions to the Decline in Philanthropy

A recent panel discussion at the Midnight Theatre in Manhattan, presented by Penta and United Way Worldwide, emphasized the urgent need for increased philanthropy and the significance of volunteering. 

The discussion highlighted the financial struggles half of working New Yorkers faced, as reported in April. Grace C. Bonilla, CEO and president of United Way New York City, stressed the importance of collaboration among corporate entities, nonprofits, and policymakers to address underlying issues. 

However, Angela F. Williams, CEO and president of United Way Worldwide, noted a decline in philanthropy, attributing it to weakened traditional donation channels like churches and payroll deduction programs. Williams also pointed out that young donors seek immediate impact and scrutinize nonprofit spending.

For more information see Clarissa Sebag-Montefiore “Searching for Solutions to the Decline in Philanthropy”, Barrons PENTA, November 17, 2023.

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

Our kids don’t want our paid-off house — or our ashes

Columnist Michelle Singletary shares that she and her husband are updating their estate plan, designating their eldest daughter as the manager of their affairs in case of incapacity or death. They have a will detailing asset distribution and specifying medical care preferences and a living will to avoid complications and ensure their wishes are followed. 

Singletary emphasizes the importance of estate planning, highlighting that many U.S. adults don't have a will and warns about the consequences of dying without one. Singletary also stresses the need for open communication with heirs about the details of the estate plan, such as expressing the desire for cremation and allocating funds for family assistance and a college fund for relatives.

For more information see Michelle Singletary “Our kids don’t want our paid-off house— or ourashes”, The Washington Post, November 17, 2023.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention. 

Article: Who Owns Our Dead Bodies: A Critical Socio-Legal Study

Arseny Shevelev (Independent) and Georgy Shevelev (Sole practitioner) published an Article in the Texas International Law Journal, Who Owns Our Dead Bodies: A Critical Socio-Legal Study, 2023. Provided below is an abstract to the Article:

We are living in a challenging era, when people are being deprived of the rights to their bodies that they have won through centuries of vehement struggle for liberty. This unfortunate truth is valid not only with regard to rights to the body while alive, but also with regard to the right to dispose of one's body in the event of death, and the root of this is the failure of the legal system to reflect prevailing social values. This Article will analyze the various options of selecting persons authorized to dispose of a corpse through the prism of the social sciences. It will scrutinize the basics underlying the state's choice in favor of either the deceased's relatives or non-blood loved ones and demonstrate the depth of the disregard for the deceased's will in determining the posthumous destiny of their own body. Ultimately, this Article will propose a model for a radical revision of a person's right to dispose of their own dead body, the heart of which will be the concept of the abstract subject of ownership. This new concept will, for the first time, justify a logically consistent mechanism explaining how a person's right to their body is capable of surviving the death of its owner and continuing to operate despite the absence of a concrete owner.

‘I Wish I Had Known That No One Was Going to Help Me’: Caregivers Worry About a Lack of Resources

The article highlights the challenges faced by adult children in caring for their aging parents by highlighting interviews with several individuals, discussing issues such as unreliable home health care agencies, a lack of assistance, and financial constraints. 

One of the individuals interviewed shares their personal experience caring for both of their parents, who both passed away from cancer and now a 97-year-old grandmother with moderate dementia. The difficulties include securing Medicaid long-term care and finding consistent and reliable home health aides. 

The desperation of agencies to hire workers is emphasized, leading to abrupt cancellations and late notices, causing emotional and physical exhaustion. The overall sentiment is that the current healthcare system for the elderly is neglected, broken, and inadequate to meet basic needs.

For more information see Reed Abelson “‘I Wish I Had Known That No One Was Going to Help Me’”, The New York Times, 14, 2023.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.

Is Private Law Normatively Distinctive?

Paul B. Miller (Notre Dame Law School) published an essay in Understanding Private Law: Essays in Honour of Stephen A. Smith, Is Private Law Normatively Distinctive?, Hart Publishing, Forthcoming. Provided below is an introduction :

This chapter was prepared for a volume paying tribute to the life and work of the late Stephen A. Smith. It examines an essay by Smith – ‘The Normativity of Private Law’ – that elaborates his methodological convictions. In the essay, Smith argues that leading American scholarship – blinkered by legal nihilism, nominalism, and narrow behaviourism – fundamentally misunderstands private law by failing to consider that private law is what it appears to be: a normative system that presents itself as morally authoritative. In this chapter, I canvass Smith’s arguments and conclude that he is persuasive: one cannot understand private law without recognizing and engaging with its normativity. But I also explore what Smith’s essay has to teach about a persistent bugbear for private law theory: the question whether there is anything genuinely distinctive about what is conventionally denominated “private law.” I argue that one can find within Smith’s work resources for a productive reframing of the narrower question whether private law is normatively distinctive. The reframing allows for nuance missing in sweeping assertions of normative distinctiveness for private law found in older work of private law theory while, at the same time, making the question more tractable and interesting.

An Unexpected Meaning of Bequest in Black's Law Dictionary Sheds New Light on the IRS's No-Basis Adjustment Ruling for Irrevocable Trusts

The term "bequest" is not straightforward, and its complexity is often overlooked, even by lawyers. Black's Law Dictionary is considered authoritative, and a close reading of its definition is crucial. 

In Rev. Rul. 2023-2, the IRS asserts that assets in an irrevocable trust do not receive a basis adjustment under certain conditions. The ruling relies on the narrow definition of "bequest" from Black's Law Dictionary, omitting the broader definition. 

Taxpayers can, surprisingly, concede the IRS's conclusion but use a second definition to argue that assets in an irrevocable grantor trust qualify for a basis adjustment, as they are considered a "bequest" under IRC § 1014(b)(1). This unexpected interpretation hinges on the broader definition of "bequest" as "money or other property that a person arranges to give to someone or an organization upon death."

For more information see Hani Sarji “An Unexpected Meaning of Bequest in Black’s Law Dictionary Sheds New Light on the IRS’s No-Basis Adjustment Ruling for Irrevocable Trusts”, Wills, Trusts, Estates Information, November 15, 2023.

Article: Reviving Revival in the Law of Wills

Richard F. Storrow (City University of New York School of Law) published an Article in the Texas Tech Law Review, Reviving Revival in the Law of Wills, October 2023. Provided below is an introduction to the Article:

When a testator dies after executing a succession of wills, the doctrine of revival may come into play to establish the testator’s final estate plan. Interjurisdictional inconsistency plagues the doctrine, making it particularly perplexing to testators. The Uniform Probate Code’s multipronged solution lacks substance, particularly in cases of revocation by implication. These problems with the revival doctrine put the paramount concern of carrying out a testator’s intent at risk without any countervailing advantage of protecting dependent survivors or administrative efficiency. This Article explains how the theory of ambulation shapes testators’ expectations about revival and argues for the reinstatement of revival as the default rule with nonrevival available by a testator’s express election.

I’ve Hidden My Trust Fund for 15 Years. Do I Finally Tell My Spouse?

A 44-year-old man writes to the NYT Ethicist because he has been keeping a secret from his spouse: a trust fund.

He has been married for ten years and together for 15, and he has a trust fund providing a monthly income of $25,000. Despite repeatedly assuring his dedicated doctor spouse that they don't need to work, the man has never disclosed the trust fund. The dilemma revolves around whether to reveal this financial truth, as family members advise against disclosure, but the burden of the secret is becoming challenging.

The columnist suggests that, although the first date may not have been ideal, the man should have disclosed his trust fund once the relationship became serious. 

Keeping such secrets can be burdensome over time. The recommendation is to reveal the truth quickly, as delaying any longer may complicate matters further. Anticipated challenges include the spouse questioning what else has been hidden and reflecting on the deception facilitated by apparent disinterest in daily activities. Seeking couples counseling is advised, acknowledging that trust is fundamental to a healthy relationship.

For more information see Kwame Anthony Appiah “I’ve hidden my Trust for 15 years. Do I finally tell my Spouse?”, The New York Times, August 11, 2023.

Special thanks to Naomi Cahn (University of Virginia) for bringing this article to my attention.

What the Wealthy Can Do to Prepare for the Expiration of Today’s High Estate Tax Exemption

Estate planners are advising wealthy individuals to utilize the current high lifetime gift and estate tax exemption of $12.92 million before it potentially decreases to around $7 million by the end of 2025. To do so, individuals are urged to employ sophisticated strategies despite the apprehension that comes with transferring a significant amount of wealth to another person's ownership or control. This includes considering spousal lifetime access trusts (SLATs). 

SLATs are irrevocable trusts where an individual sets up a trust for their spouse as the primary beneficiary, with children or grandchildren as beneficiaries after the spouse's passing. This allows the individual to remove assets from their estate while retaining a potential avenue to access the assets in the future through the spouse. SLATs must be funded with assets owned solely by the individual, and they help shield both the assets and future growth from estate taxes. However, challenges arise in the case of divorce, as SLATs are irrevocable, and the trust continues for the benefit of the ex-spouse, with the original creator still responsible for taxes on trust income.

For more information see Karen Hube “What the Wealthy Can Do to Prepare for the Expiration of Today’s High Estate Tax Exemption”, Barrons PENTA, November 7, 2023.

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

CLE: QTIP Trusts Holding Interests in LLCs and Partnerships (Danger Zone)

Seymore Goldberg provided information for an upcoming CLE: QTIP Trusts Holding Interests in LLCs and Partnerships (Danger Zone) on Thursday, November 16th. Please find more information below:

Many taxpayers may own partial interests in LLCs or partnerships.  Should such interests be the subject of a bequest to a QTIP trust? The instructor recently made a Revenue Ruling request to the IRS regarding this significant QTIP trust tax issue.  This request covered in part the following:

• • Systemic significant fiduciary income tax compliance issues for trustee may be triggered by such transactions under the trust accounting rules in New York State and eight other jurisdictions.  Who would want to be a trustee?
  • IRS rules for trust fiduciary income tax returns (Form 1041), QTIP marital deductions and the jurisdiction’s trust accounting rules. 
  • What if the jurisdiction’s [over 35] trust accounting rules go one way and the IRS rules go the other way?  QTIP/conflict of laws issue.
  • QTIP marital deduction at risk or not in over 35 jurisdictions.

Additional key topics include:

• • Waiver of IRS penalty rules under Secure 
  • Excise tax rules that apply for first distribution calendar year
  • Major IRS statute of limitation changes under Secure 2.0 Act of 2022
  • Major IRS penalty changes under Secure 2.0 Act of 2022
  • Estate planning and professional liability court case (privity issue)
  • Professional liability court case (privity issue)
  • IRA beneficiary malpractice court case
  • Actual and potential malpractice issues regarding retirement distribution advice.  Giving wrong advice or failure to give timely advice (includes systemic issues) in privity and non privity jurisdictions.
  • Systemic major non-compliance issues involving IRA trusts and Roth IRAs that you must be made aware of. Consequences of non-compliance can be severe for many.