Wills, Trusts & Estates Prof Blog

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

Wednesday, February 24, 2021

IRS Rolls Out Online Option For Submitting Authorization Forms

TaxThe Internal Revenue Service (IRS) has released a new online option that will allow tax professionals to electronically submit authorization forms. 

The two forms covered under the new option are "Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. These forms allow taxpayers to authorize the IRS to disclose their tax information to third parties, such as, tax professionals." 

The Form 2848 allows taxpayers to authorize eligible individuals to speak to the IRS on their behalf and also allows that person to receive related confidential tax information. 

The Form 8821 isn't as useful because it only allows the appointed representative to inspect or receive confidential information verbally or in writing "for the type of tax and the years or periods you list on the form." This form does not allow anyone to speak on your behalf. 

You can use the new options by creating a Secure Access Account and is fairly simple and quick to set up. 

See Kelly Phillips Erb, IRS Rolls Out Online Option For Submitting Authorization Forms, Forbes, January 25, 2021. 

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

February 24, 2021 in Current Events, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Thursday, February 11, 2021

Remote Witnessing of Wills: A Step in the Right Direction

The COVID-19 pandemic has incited some changes in the realms of estate and post-death planning. With the pandemic taking so many lives, many were forced to thinking about planning for their death, and they had nothing but time to do it. 

Many are required to self-isolate as to not risk their health or the health of loved ones. This has placed a burden on those that want to have wills executed, given the witness requirements and other things unattainable during the pandemic.

S.9 Wills Act 1837 sets out the requirements for executing and witnessing a will. Changes to current legislation may make it a bit easier to make a will during the global crisis. The "Physical presence" has been expanded to include virtual presence by means of videoconference or other visual transmission. 

The temporary change applies to all wills and codicils made between January 31, 2020 and January 31, 2022. After that, the revision will expire and things will go back to the way they once were. "It is important to note that, similar to other COVID-19 measures, the Government has the authority to shorten or extend this two-year period, should it be deemed appropriate to do so." 

In regard to "virtual presence" the most important element of virtual witnessing is that all parties have a "clear line of sight." Also, pre-recorded videos are not allowed. 

The Government also sets out other helpful rules, regulations, and guidelines to help out. 

See Simon Goldring & Elysa Jacobs, Remote Witnessing of Wills: A Step in the Right Direction, McDermott, Will, & Emery, February 10, 2021. 

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

February 11, 2021 in Current Events, Elder Law, Estate Planning - Generally, New Legislation, Wills | Permalink | Comments (0)

Monday, February 1, 2021

Article: Keeping America: Wealth Concentration and the Need for Repaired Revenues and Basic Income

M. Ryan Groff recently published an article entitled, Keeping America: Wealth Concentration and the Need for Repaired Revenues and Basic Income, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article. Estate planning

This paper comes from a place of deep concern about wealth concentration in the United States of America, but also from a place of hopeful expectation. When I started my research in mid-2019, I did not imagine preparing the final draft during a global pandemic which has already killed nearly half a million people. Unfortunately, the spread of COVID-19 exposed the fragility of the U.S. economy. While necessary, shelter in place orders suspended the livelihoods of millions without savings for unexpected expenses, and caused weekly unemployment claims to jump 1,068%. In a strong demonstration of its legal and moral duty to ensure the wellbeing of the American people during times of crisis, the U.S. federal government quickly passed the $2.2 trillion “CARES” Act, the largest appropriations bill in its history. Despite longstanding policy disagreements over using public funds for public welfare, a crisis compelled Congress and the White House towards unprecedented compromise on multiple stimulus bills in only a few weeks.

The same resolve will be necessary to combat wealth concentration. Deconcentrating wealth will not be easy. Effective solutions will require engaging unpopular topics like tax policy, estate planning and trust provisions, property law, and tedious readings of 18th century political theory. While few are qualified to propose solutions at this intersection, and even fewer are willing to undertake this Sisyphean task, it is as necessary as it is difficult.

The federal government must find the political courage to reverse half a century of policies creating unsustainable levels of wealth concentration by repairing revenues and guaranteeing Americans a basic income. The estate planning and private client bar should help.

February 1, 2021 in Articles, Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Saturday, January 16, 2021

PA’s Revised Uniform Fiduciary Access to Digital Assets Act Takes Effect on January 19, 2021

DigitalassetsPennsylvania's Revised Uniform Fiduciary Access to Digital Assets Act will become effective on January 19, 2021.  The Act "provides the authority for certain categories of fiduciaries to access a deceased individual's digital assets or electronic communications, and creates a framework for disclosure of an individual's digital assets and electronic communications." 

The Act will not apply to a digital asset of an employer used by an employee in the ordinary course of business. 

Digital asset is defined as "electronic records in which an individual user has a right or interest and does not include underlying assets or liabilities unless the asset or liability is itself an electric record." 

The law applies to fiduciaries, personal representatives, persons acting as guardians, and trustees of an estate if the user was a Pennsylvania resident at the time of death.

The law also recognizes there are online tools offered by digital service providers that allow users to direct a digital asset custodian to disclose (or not disclose) a user's digital assets. If the online service has not been used, the user may use a will, trust, power of attorney, or other record to allow the disclosure by a fiduciary of the user's digital assets. 

"In the absence of either the use of an online tool or express direction, the terms of service the user had with their digital asset custodian — defined as the entity that carries, maintains, processes, receives or stores a digital asset of a user — will be applicable." 

There are also other provisions and procedures for disclosing digital assets that allow other types and degrees of authority, access, and disposition of a user's account.

See PA’s Revised Uniform Fiduciary Access to Digital Assets Act Takes Effect on January 19, 2021, Weiner, Brodsky, Kider PC, January 7, 2021. 

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

January 16, 2021 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

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)

Tuesday, December 15, 2020

Appeals court sends ‘Leaving Neverland’ fight to arbitration

HboA federal appeals court in California ruled that a lawsuit filed bye Michael Jackson's estate can go forward in private arbitration. Michael Jackson's estate filed the lawsuit over the HBO documentary about two of MJ's sex abuse accusers. 

The three-judge panel of the 9th U.S. Circuit Court of Appeals affirmed the decisions of two lower  courts, ruling in favor of Michael Jackson's estate. 

Without further appeals, the case will go to a private arbitrator, which is required by the 1992 contract that the estate's lawsuit sought to enforce. 

In the event of private arbitration, the proceedings will be kept out of public view. MJ's attorneys said that they would like for the proceedings to be as open as possible.

The agreement between Jackson and HBO, prohibited the latter from disparaging Jackson in any way, which the estate felt was done by airing the molestation allegations of Wade Robson and James Safechuck in "Leaving Neverland."

“In the court’s own words, HBO ‘agreed that it would not make any disparaging remarks concerning Jackson,’” estate attorneys Howard Weitzman and Jonathan Steinsapir said in a statement. “It’s time for HBO to answer for its violation of its obligations to Michael Jackson.”

HBO argued that the provisions was no longer valid since both sides had performed their parts of the agreement. Jackson's family has alleged that the documentary's allegations are false and came from two men "who previously told authorities they were not molested." 

See Andrew Dalton, Appeals court sends ‘Leaving Neverland’ fight to arbitration, Associated Press, December 14, 2020. 

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

December 15, 2020 in Current Affairs, Current Events, Estate Planning - Generally, Music, New Cases, New Legislation, Television | Permalink | Comments (0)

Wednesday, December 2, 2020


Estate planningOn November 17, 2020, the Treasury Department and the IRS released their Priority Guidance Plan for the 12 months from July 2020 through June 2021. 

The American College of Trust and Estate Counsel (ACTEC) posted an overview of what the Treasury and the IRS will focus on for the next seven months. 

Part 1 of the plan is titled "Implementation of Tax Cuts and Jobs Act (TCJA)" and contains 38 items. Of the 38 items, there are two in particular that will interest estate planners. 

Item 4 of Part 1 will have some focus on the deduction of estate and trust expenses. The item includes Notice 2018-61 which was originally published on July 30, 2018, which stated, "“the Treasury Department and the IRS intend to issue regulations clarifying that estates and non-grantor trusts may continue to deduct expenses described in section 67(e)(1)” despite the eight-year “suspension” of section 67(a) in the 2017 Tax Act by new section 67(g)." 

Item 33 of Part 1 provides "significant reinforcement for the proposition that the death of the grantor does not by itself cause the recognition of gain with respect to appreciated assets held in a grantor trust."

The Priority Guidance Plan also includes information on burden reduction, relief regarding GST exemption allocations and elections, and more general guidance. The ACTEC website also provides information on omissions from the Priority Guidance Plan. 

The aforementioned information and more is available in the source cited below. 

See 2020-2021 TREASURY-IRS PRIORITY GUIDANCE PLAN, The American College of Trust and Estate Counsel, November 30, 2020. 

December 2, 2020 in Current Events, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Thursday, November 19, 2020

Year-end planning just got a whole lot more complicated

Estate planningAs Election Day approached, talk surrounding estate planning grew. Presidential candidate Joe Biden announced his tax plan proposal, which many thought may come to fruition if the Democratic Party won the Presidency and took over a majority of the Senate. The proposed tax plan would significantly reduce estate and gift tax exemptions. 

Although the election has come and gone, there is not yet much clarity surrounding the future of estate planning. It appears more likely than not that Joe Biden will be the next President, there is still a lot of discussion. Further, the determination of which party will control the Senate will not be made until the two runoff elections in Georgia are held in January.

Therefore, we will not know who will control the Presidency, House, and Senate until after 2020 has ended. Due to the uncertainty, estate planning has been and will continue to be difficult. 

It may be in your client's best interest to take advantage of the current tax exemptions while they are available. Whether this is what is best for your client will depend on their current financial situation. It may be the case that the potential reduced exemptions will not affect them.

However, "The harder situation is for those individuals who might not have a federal tax due at death if the exemptions stay where they are, but would owe tax if they were to be cut by 50% or more. Those of us who lived through 2012 have already seen this movie. In these cases, there may be ways to structure the gift to give a family more time to make the decision."

It is important to discuss the implications of the new exemption rates and the potential impact they could have on your client, whether or not the new tax plan is a sure thing.

See Scott Bieber, Year-end planning just got a whole lot more complicated, Thompson Coburn LLP, November 13, 2020. 

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

November 19, 2020 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, New Legislation | Permalink | Comments (0)

Tuesday, November 17, 2020

It’s a tough year for year-end tax planning

Estate planningWith the new year approaching and the likelihood of a new president, advisers have their work cut out for them. Not knowing who will control the senate, leaves helping clients plan difficult. 

If the Democrats control the Senate, it is more likely that tax plans will change dramatically as Presidential candidate Joe Biden's proposal is very different from what President Donald Trump implemented. Control of the Senate will likely be determined on the Georgia Senate seats. 

Although possible, the odds of the Democrats winning both Georgia Senate seats is only 25%. Thus, it is not very likely. 

Even though Democratic control of the Senate is unlikely, the possibility should be taken into consideration. Under Biden's proposal, capital gain tax, charitable giving, and estate tax would be affected. 

Biden has proposed raising the capital gain rate form 20% to 39.6% for taxpayers with income over $1 million. So it may be more beneficial for individuals to sell before the end of the year. 

In regard to charitable donations, Biden's proposal caps itemized deductions at a 28% tax benefit for anyone making more than $400,000, compared to the current rate of 37%. 

In regard to estate tax, the Biden plan would reduce the gift and estate tax exemption from the current $11.58 million to $3.5 million. 

If your clients are making plans and their plans include one of these three categories, it may be safe for them to go ahead and make their moves before 2021. 

See Dave Strausfeld, J.D., It’s a tough year for year-end tax planning, Journal of Accountancy, November 16, 2020. 

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

November 17, 2020 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation | Permalink | Comments (0)