Wills, Trusts & Estates Prof Blog

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

Wednesday, December 8, 2021

A Texas woman was found dead 2 days after she signed a $250,000 life insurance policy, and her husband has been charged with her murder

PoliceChristopher Collins, a Texas man was recently charged with murder after his wife, Yuan Liang, was found dead just days after the couple took out a life insurance policy. 

Collins told police that he "suspected" that his wife was killed by intruders, however, the house was strangely not ransacked. Liang was found dead in the couple's home just two days after the couple signed a $250,000 life insurance policy. 

Surveillance footage from the gym showed Collins "pacing around" the gym for 45 minutes, but only working out for 5 minutes before he called the police from the gym's cafe. When police searched a gym locker, they uncovered Liang's wallet—which Collins had reported missing—and a cosmetic bag.

Collins told police that Liang sent him a text message about a person outside of their home while he was at the gym. Collins further stated that he lost contact with his wife shortly after she reported the "suspicious male" outside of their home. 

Although Collins told police that the couple did not have a life insurance policy, officers who searched the home found a piece of paper evidencing a life insurance policy for $250,000. 

Collins did not appear in his first scheduled court appearance due to "mental health reasons." It is unclear how Collins intends to plead. Collins is currently being held on a $150,000 bond. 

See Katie Balevic, A Texas woman was found dead 2 days after she signed a $250,000 life insurance policy, and her husband has been charged with her murder, Yahoo News, November 27, 2021. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

December 8, 2021 in Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0)

Wednesday, November 17, 2021

An Attorney’s Introductory Guide to the IRA Distribution Rules Under the Secure Act

Goldberg_Book_3New York County Lawyers Association has just released Seymour Goldberg's excellent eBook entitled An Attorney’s Introductory Guide to the IRA Distribution Rules Under the Secure Act. As the website to order this book explains:

The Guide, written in clear, concise language with multiple examples, is designed to help attorneys advise their clients on the major changes the Secure Act made regarding retirement distribution rules.

Not only will the Guide assist attorneys in counseling their clients, but it will also help them with their own retirement planning!!!

November 17, 2021 in Books, Non-Probate Assets | Permalink | Comments (0)

Tuesday, October 19, 2021

Approaching Equitable Retirement Tax Incentives

Albert Feuer has recently posted on SSRN  his article entitled Approaching Equitable Retirement Tax Incentives.   Here is the abstract of his article:

In September, the Ways-and-Means Committee of the House approved proposals to substantially improve the equity of retirement tax incentives for American workers. The new requirement that employers automatically enroll employees in a simple defined contribution plan, and the new refundable retirement savings tax credits, both do so. One major proposal needs to be added. Roth individual retirement accounts and annuities (IRAs) must be subject to the same required minimum distribution (RMD) rules as traditional IRAs. Other Committee proposals may be improved. Simplify the new excess balance distribution rules for a taxpayer, whose aggregate IRA and defined contribution accounts exceed $10 million at the end of a tax year. Harmonize the sanctions for excess balance violations with those for RMD rule violations. Simplify the new Roth IRA conversion rules. Remove the income threshold triggers for the new limits. Increase reporting about participant and beneficiary individual accounts.

Congress is now considering how to better implement the common-sense principle that tax incentives to encourage adequate retirement savings be focused on retirement savings. By increasing transparency and the benefits directed at those with inadequate retirement saving as described herein, and reducing loopholes and undue complexity, Congress may not only increase the equity and efficacy of our huge retirement tax incentives and our tax system, but boost Americans’ confidence in their government.

October 19, 2021 in Articles, Non-Probate Assets | Permalink | Comments (0)

Saturday, October 9, 2021

The Next Step for Tax Policy Equity

Albert Feuer recently posted on SSRN his article entitled The Next Step for Tax Policy Equity. Here is the abstract of his article:

In September, the House of Representatives Ways and Means Committee released proposals requiring many employers without retirement plans to establish and automatically enroll employees in IRAs or simple 401(k) plans or in IRAs with the default contributions going to Roth IRAs. The proposals would also require a person whose employee benefit plans, Roth IRAs, and traditional IRAs have an aggregate balance greater than $10 million to withdraw at least 50% of the excess balance. Broadening those proposals to require Roth IRAs to comply with the same required minimum distribution (RMD) rules that now govern employee benefit plans and traditional IRAs, would better implement the common-sense policy of using tax incentives to encourage adequate retirement savings by focusing on retirement savings.

Roth IRAs and their participants are subject to the same RMD rules after the death of the IRA participant and the participant’s spouse, if any, as traditional IRAs and tax-advantaged pension and profit-sharing plans, including their Roth designated accounts,. Roth IRAs and their participants should also be subject to the same RMD rules during the life of the IRA participant and the IRA participant’s spouse, if any. An IRA violating those rules would lose its tax exemption, and a person failing to take a timely RMD would be subject to a 50% excise tax.

Subjecting Roth IRA participants to both the excess benefit distribution and the RMD rules would better limit the retirement tax incentives to retirement savings. Those with Mega-IRAs, such as Mr. Thiel’s multi-billion Roth IRA, could continue to receive tax incentives for reasonable-sized retirement accounts, but the tax incentives on any excess balances would be dramatically reduced. Participants with Roth or IRA accounts of any size would similarly be required to withdraw significant funds distributed during the expected life of the participant and the participant’s spouse, if any. This would permit Congress to adopt more equitable policies, such as making more funds available to encourage adequate retirement savings, such as increasing the matching savings credits to low-income tax payers who make contributions to tax-favored retirement plans above the Ways and Means proposed amount.

October 9, 2021 in Articles, Non-Probate Assets | Permalink | Comments (0)

Is This the Time to Harmonize the Required Minimum Distribution Rules?

Albert Feuer has recently posted his article entitled Is This the Time to Harmonize the Required Minimum Distribution Rules? on SSRN. Here is the abstract of his article:

In September, the House of Representatives Ways and Means Committee released proposals requiring many employers without retirement plans to establish and automatically enroll employees in IRAs with the default contributions going to Roth IRAs or in simple 401(k) plans. The proposals would also require a person whose employee benefit plans, Roth IRAs, and traditional IRAs have an aggregate balance in excess of $10 million to withdraw at least 50% of the excess balance. Broadening those proposals to require Roth IRAs to comply with the same required minimum distribution (RMD) rules that now govern employee benefit plans and traditional IRAs, would better implement the common-sense policy of using tax incentives to encourage adequate retirement savings by focusing on retirement savings.

Roth IRAs are subject to the same RMD rules, as traditional IRAs and tax-advantaged pension and profit-sharing plans, including their Roth designated accounts, after the death of the IRA participant and the participant’s spouse. They should also be subject to the same RMD rules during the life of the IRA participant and the IRA participant’s spouse, if any.

Subjecting Roth IRA participants to the excess benefit distribution and to the RMD rules would better limit retirement tax incentives to retirement savings. Those with Mega-IRAs, such as Mr. Thiel’s multi-billion Roth IRA, could continue to receive tax incentives for reasonable-sized retirement accounts, but the tax incentives on any excess balances would be dramatically reduced. Similarly, participants with Roth or IRA accounts of any size would be required to withdraw significant funds during the expected life of the participant and the participant’s spouse, if any. Such harmonization would permit Congress to make more funds available to encourage adequate retirement savings, such as providing larger savings credits to low-income tax payers who make contributions to tax-favored retirement plans than the Ways and Means proposal offers.

October 9, 2021 in Articles, Non-Probate Assets | Permalink | Comments (0)

Webinar: Tax & Estate Planning w/IRAs After the Secure Act

The following is from the program's announcement found here:

Tax and Estate Planning with IRAs after the Secure Act

3 NY CLE Credits: 3 Skills; Transitional and Non-transitional; 3 NJ CLE Credits: 3 General; 3 CPE Credits for CPAs (NY only)
 
Faculty:  Seymour Goldberg, Esq., CPA, MBA (Taxation), JD

Many taxpayers have accumulated a considerable amount of assets in their retirement accounts.  The Secure Act has created many new technical deadlines that must be followed in order to avoid IRS penalties. 

Tax planning and estate planning for your clients that have substantial retirement assets have become more important than ever.  You need to be aware of common errors that frequently take place.

This 3-credit CLE/CPE program includes:

  • Overview of the Retirement Distribution Rules under the Secure Act
  • Advantages of Trusts as IRA Beneficiary
  • Common Errors in Retirement Distribution Planning
  • Why many IRA beneficiary forms are defective
  • Statute of limitation issues including IRA penalties
  • Unintended Beneficiaries of Retirement Accounts or "My IRA is Going Where?"
  • And much more

ABOUT the INSTRUCTOR:  Seymour Goldberg, CPA, MBA (Taxation), JD is a senior partner in the law firm of Goldberg & Goldberg, P.C., Melville, New York. He has conducted over 100 continuing professional education programs for attorneys and CPAs in the area of IRA distributions and IRA compliance issues. He is a former IRS agent and IRS instructor. Mr. Goldberg is  the recipient of Outstanding Discussion Leader Awards from both the AICPA and the Foundation for Accounting Education.  His manuals written for the American Bar Association can be found in well over 100 law school libraries.  Two of his manuals cover IRA issues and IRS compliance issues involving IRAs.

Mr. Goldberg can be reached at 516-222-0422 or by email at info.goldbergira@gmail.com.

The New York and New Jersey CLE credits for this program will be issued by NYCLA 
The CPE credits* for this program will be issued by IRG Publications.
* CPA registrants must submit NYS CPA License Number after selecting registration option.

IRG Publications CPE details: 
Recommended CPE Credit Hours:  3 
Method of Presentation:  Webinar 
NY Sponsor:  IRG Publications 
Sponsor License No:  002963 
Subject area:  Taxation
Learning objective:  To  acquire knowledge involving tax planning and IRS compliance issues when dealing with IRA assets after the Secure Act
Level:  Intermediate 
Prerequisite:  Basic knowledge of taxation

Member (CLE Credit): $85
Non-member (CLE Credit): $105
CPA (CPE Credit ONLY): $75
JD/CPA Member (CLE & CPE Credit): $105
JD/CPA Non-Member (CLE & CPE Credit): $125

You must be signed in to register. If you do not have an account, you can create it for free.
For technical and account related issues, please contact us at dradjabov@nycla.org

October 9, 2021 in Conferences & CLE, Non-Probate Assets | Permalink | Comments (0)

Wednesday, September 8, 2021

Brother Had Standing Under Texas Slayer Statute To Seek Declaration Regarding Rights To Insurance Proceeds

Estate planningIn Lawrence v. Bailey, the Texas First District Court of Appeals addressed whether "a relative had standing under the Texas Insurance Code's Slayer Statute to obtain a declamatory judgment as to the disposition of life insurance proceeds." 

Steven Lawrence's wife LaQuita was named the primary beneficiary in his life insurance policy, which was issued by Hartford in January 2008. Their son Ross was named the contingent beneficiary. 

Steven and LaQuita were killed in their home in October 2013 and ross was indicted for capital murder for killing them. 

Hartford filed an interpleader petition in order to seek direction as to what to do with the life insurance funds. In the mean time, Hartford deposited the insurance proceeds with the registry of the court. 

Robert (Steven's brother) filed a tradition motion for summary judgment, in which he argued that based on the Texas slayer statute, he was entitled to the life insurance proceeds as a matter of law. 

The trial court ruled that it was granting the special exceptions and denying Robert's motion for summary judgment and set a trial for March of 2020. One month later, the administrator of Steven's Estate filed a "Motion to Close and Distribute Funds in Registry of the Court to the Estate of Steven Ross Lawrence, Deceased."

The trial court granted the administrator's motion and Robert filed a motion for new trial alleging that the trial court "spontaneously granted" the motion to distribute the interpleader funds to Steven's Estate, "without a hearing or notice" to him. 

Robert also asserted that "[t]his was a fundamental violation of Robert's right to due process." Robert asked the trial court to vacate the order awarding the insurance proceeds to Steven's Estate and grant him a new trial. The trial court denied the motion and Robert appealed. 

Under the Texas Insurance Code: 

A beneficiary of a life insurance policy or contract forfeits the beneficiary's interest in the policy or contract if the beneficiary is a principal or an accomplice in willfully bringing about the death of the insured.

The Texas appeals court determined that Robert had standing to obtain declaratory relief under the Texas slayer statute. The court determined that "the record also demonstrated that a real controversy exists between the parties regarding the insurance proceeds, since Hartford interpled funds indicating it anticipated rival claims to the funds." 

Despite the fact that the murder case against Ross had not been solved yet, the court found that the Texas Slayer Statute does not require that any criminal case relating to "whether the beneficiary willfully brought about the insured's death be resolved before the willfulness determination is made." 

See Brother Had Standing Under Texas Slayer Statute To Seek Declaration Regarding Rights To Insurance Proceeds, Probate Stars, August 30 2021. 

September 8, 2021 in Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Wednesday, August 25, 2021

Mega-IRAs, Boon or a Bane?

Albert Feuer recently posted an updated version of his article, Mega-IRAs, Boon or a Bane?, on SSRN. The article also appears in 49 Comp. Plan. J. No. 8, 179 (2021). Here is the abstract of this article:

Peter Thiel reportedly converted a 1999 Roth IRA investment of $1,700 in PayPal “founder’s shares,” into assets that appeared to be worth $7 billion on June 30, 2021. There are serious questions whether this IRA and other Mega-IRAs are entitled to the IRA tax benefits. The IRS should have the resources to challenge the tax exemption of any Mega-IRAs appearing to violate the current law. These Mega-IRAs will disappear when the IRS prevails. There should also be statutory changes to direct tax incentives not at Mega-IRAs and their owners, but at improving the retirement readiness of American working families. This was why traditional and Roth IRAs were introduced and why they are called individual retirement accounts. The following common-sense changes would help achieve this goal by narrowing the retirement savings focus of retirement tax incentives:

(1) All the IRAs of an individual whose traditional IRAs, Roth IRAs and designated Roth 401(k) IRAs have an aggregate value in excess of $5 million at the end of any calendar year shall be called Mega-IRAs and should lose their tax qualification if the Mega-IRAs do not distribute half of the excess by the end of the following year;

(2) All of an individual’s Mega-IRAs should lose their tax-qualification if the individual makes any contributions to any Mega-IRA for the following calendar year;

(3) The minimum required distribution rules applicable to traditional IRAs and designated Roth 401(k) IRAs should apply to Roth IRAs, i.e., annual distributions should start by April 1 of the year following the year, if any, the participant reaches age 72; and

(4) The annual excise tax for excess contribution to any IRA should be increased from 5% to 10% and should apply to the earnings associated with any excess contributions for the year at issue, rather than only to the excess contributions, as is now the case.

August 25, 2021 in Articles, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (1)

Wednesday, February 10, 2021

Kansas Supreme Court: “Any Person” Means What It Says In Double Penalty Probate Statute For Conversion Of Decedent’s Property

Estate planningIn In re Estate of Taylor, "the Kansas Supreme Court interpreted the plain language of the Kansas Probate Code’s conversion statute to determine that the double penalty provision for conversion of a decedent’s assets applies to any person who converts assets, not just the appointed executor or administrator." 

Thelma Taylor died testate in November 2015. Laura Kelly was named as executor in Thelma's will which directed that the executor "shall have absolute discretion to distribute any personal property not disposed of [by separate writing] or to sell all remaining property and add to the residue of my estate which shall then be paid in [its] entirety to the Boys and Girls Club of Atchison, Kansas." 

Kelly filed a petition to admit the will to probate. The petition stated that the estate included household furnishings and life insurance proceeds worth $1000 and $8300 respectively. The petition for informal administration was granted and Kelly was granted letters testamentary.

The Boys and Girls Club then moved for a supplemental inventory, which valued the estate assets to a little over $12,000. It also valued non-probate assets which included a checking account with $150 and $11,000 cash located in a safe deposit box. The cash in the deposit box were described as "[j]ointly owned with Laura Kelly as joint tenants with the right of survivorship." 

Kelly later petitioned for a final settlement granting the Club the amount leftover after paying debts and expenses, which would leave the Club with about $500. 

The Club objected to this amount and alleged that Kelly should be held liable for double the value of any converted property. 

The District Court held that Kelly wrongfully converted the safety deposit box's contents and breached her duties as Thelma's personal representative. The court ordered Kelly to pay $22,000, which is double the amount of the converted property ($11,000 in cash). 

The Court of Appeals found that Kelly converted the property, "but divided over the double penalty." 

Under K.S.A. 59-1704, "any person that. . . converts. . . any personal property of a decedent or conservatee, such person shall be liable for double the value of property. . . converted." 

The Kansas Supreme Court ultimately held that K.S.A. 59-1704 applies to any person, even appointed fiduciaries. 

Essentially, "You cannot convert estate assets prior to being appointed as executor and be exempt from the double penalty provision of the Kansas Probate Code’s conversion statute." 

See Kansas Supreme Court: “Any Person” Means What It Says In Double Penalty Probate Statute For Conversion Of Decedent’s Property, Probate Stars, February 4, 2021. 

February 10, 2021 in Estate Administration, Estate Planning - Generally, New Cases, Non-Probate Assets, Wills | Permalink | Comments (0)

Monday, January 11, 2021

It’s Mother vs. Son in Britain’s Priciest Divorce War

DivorceTemur Akhmedov is not your average 27-year-old. Temur is being sued by his mother, Tatiana Akhmedova, for nearly $100 million in cash and assets. Temur's parents have divorced and Tatiana feels that her son has been shielding his father's—her ex-husband— assets. 

Ms. Akhmedova is attempting to gain a share of the $615 million divorce settlement, which is believed to be the largest in Britain's history. "Her ex-husband has refused to hand over a single ruble and has kept his money, and himself, far away from the United Kingdom and the reach of its courts."

Since Ms. Akhmedova has not been able to reach her husband or his assets, she got creative. Ms. Akhmedova sued her oldest son, Temur, a U.K. resident, putting his holdings within reach. 

As Temur's lawyers candidly put it, "[his father] showered Temur with unimaginable amounts of money." 

Included in the 27-year-old's assets are a three-bedroom apartment that is worth $40 million, a $460,000 Rolls-Royce S.U.V., Mercedes-Benzes and more. 

See David Segal, It’s Mother vs. Son in Britain’s Priciest Divorce War, N.Y. Times, January 5, 2021. 

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

January 11, 2021 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0)