Wills, Trusts & Estates Prof Blog

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

Friday, December 7, 2018

6 Things You Should Do Now to Prepare for Your Own Funeral

CasketDeath is inevitable, the one appointment that we may be able to put off but never fully cancel. It will happen. And when your family does not know the intricacies of how you want to be remembered during your funeral, or there may be some emotional barriers, your funeral may not be the ceremony you were hoping it to be.

Here are 6 ways you can plan and prepare for your own death and commemoration:

  • Do the paperwork to designate who will be in charge of decision making for your funeral.
    • Without authorization, there is a default order for who will be in charge of decision. First is the legal spouse, then adult children, then parents, then siblings. The most effective document to authorize a different person that that is called a Durable Power of Attorney for Health Care (DPOAHC).
  • Make sure the documents are legal and kept where everyone can find them.
    • Ensure that your designated agent is aware of and willing to undertake their responsibilities. Secondly, make sure the document is signed and notarized, making it a legally binding document that the funeral home can trust.
  • Consider your funeral options now—so your loved ones don’t have to do it later.
    • After your passing, your family and loved ones may be in mourning and in a haze of grief. The last thing you would wish upon them would be more stress. 
  • Sit down with your loved ones to tell them what your funeral wishes are.
    • The most important decision is the disposition of your body - whether you wish to be cremated or buried. This might be an uncomfortable conversation, but your family will need the guidance.
  • You can start saving for your own funeral now.
    • Hard truth: funerals cost money, even the most frugal ones. The caring option for your loved ones is to have it already paid for when your time comes.
  • Remember that death is natural, and there’s nothing morbid about discussing yours—this is about making life easier for those you leave behind.

See Ace Ratcliff, 6 Things You Should Do Now to Prepare for Your Own Funeral, Self, August 30, 2018.

Special thanks to Carissa Peterson (Hrbacek Law Firm, Sugar Land, Texas) for bringing this article to my attention.

December 7, 2018 in Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Thursday, December 6, 2018

Article on ‘First Among Equals’: Breaking the Deadlock in Parental and Sibling Funeral Disputes

UnionjackHeather Conway recently published an Article entitled, ‘First Among Equals’: Breaking the Deadlock in Parental and Sibling Funeral Disputes, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Family disputes over a loved one’s funeral arrangements are increasingly frequent, with courts intervening if consensus cannot be reached. In many common law jurisdictions, the law favours the executor where the deceased made a will and the highest ranking next-of-kin where the deceased died intestate. But what if two or more people fall within the same kinship tier and have equal rights to determine the deceased’s fate- who has the final say? Adopting a uniquely comparative approach which draws the authorities together for the first time, this article analyses the factors devised by judges in Australia and England, and contrasts them with the discrete statutory tests adopted in parts of Canada and the United States. Having evaluated the various approaches, the article proposes its own hybrid legal solution for breaking the deadlock in so-called ‘equal kinship disputes’.

December 6, 2018 in Articles, Current Affairs, Estate Planning - Generally, Wills | Permalink | Comments (0)

Assisted Suicide for Alzheimer’s Patients Raises Incredibly Difficult Issues

HippocraticPhysician assisted suicide was thrust into the public eye when a 104-year-old Australian scientist David Goodall decided to end his life medically. He did not have any serious or terminal illnesses. He just believed he was old, and did not want to have his abilities continue to diminish and end up in a nursing home. Because assisted suicide is not legal in Australia, he had to travel to Switzerland. He adamantly told the press that he "wanted to die."

Seven jurisdictions in the United States provide for physician assisted suicide: California, Colorado, the District of Columbia, Hawaii, Montana (with a court decision), Vermont and Washington state. Put there are built in stipulations and limits on the procedure, including: a condition that is terminal, meaning the patient has six months or less to live, restrictions on what type of doctor can write the prescription, waiting periods, different levels and forms of consent by the patient, and a showing that the patient is mentally competent.

Patients with Alzheimer's have issues with many of the restrictions. The disease can take years to kill someone, so when a person is diagnosed with Alzheimer's it is not considered a terminal illness. But the disease breaks down a person's identity to the point where they are a shadow of who they were, and many people want to end their lives before the deterioration is a burden. But by the time the erosion and disease is considered terminal, Alzheimer's patients will have lost their mental capacity to reason and thus will be barred from requesting assisted suicide. They will no longer be of sound mind.

An advanced directive may be a solution to this problem, stating the individual’s wishes before the person is stricken with Alzheimer’s disease. This would similar to a DNR or refusal of aggressive medical interventions. Also known as a living will, it is a  written statement of a person’s desires regarding medical treatment in cases where he or she is unable to give informed consent.

See Josh Bloom & Henry I. Miller, Assisted Suicide for Alzheimer’s Patients Raises Incredibly Difficult Issues, Fox News, December 2, 2018.

December 6, 2018 in Death Event Planning, Estate Planning - Generally, Science, Travel, Wills | Permalink | Comments (0)

CLE on IRA Trusts: RMDs and Ensuring the Stretch

CLEThe National Business Institute is holding a teleconference entitled, IRA Trusts: RMDs and Ensuring the Stretch, on Thursday, December 20, 2018, at 11:00 a.m. to 12:30 p.m. Central. Provided below is description of the event:

Program Description
Ensure Clients Make the Most of Inherited IRAs
This focused course offers practical strategies for ensuring the inherited IRAs last as long as possible and comply with the RMD rules. Learn IRA trust drafting tactics and planning approaches to maximize the stretch, ensure asset protection, and minimize tax burdens. Register today!
Choose the most beneficial IRA trust structure and decide whether subtrusts are needed.
Get sample powers of appointment language that ensures the longevity of the trust.
Plan distributions to ensure RMD rules compliance.

Who Should Attend
This program is designed for attorneys. It will also benefit accountants, CPAs, and trust officers.

Course Content
How the Mechanics of the Retirement Account Shapes the IRA Strategy
Ensuring the Stretch: Beneficiary Designations, Individuals vs. Trusts, and More
Structuring the IRA Trusts and Subtrusts: Asset Protection and Tax Tactics
Drafting Powers of Appointment That Ensure the Longevity and Health of the Trust
Effective Approaches to Ongoing Compliance with the RMD Rules

December 6, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

The SALT Work-Around: Shaken Not Stirred

IrsThe Tax Cuts and Jobs Act (TCJA) imposes a $10,000 cap - $5,000 if married filing separately - on the amount of state and local taxes (SALT) a taxpayer can deduct. This was effective on January 1, 2018, shortly after the Act was passed. Tax advisors tax advisors weighed pre-paying 2018 obligations in 2017 to get around it, but this was foiled when it was clarified that payments in 2017 for 2018 obligations would be treated as if they were made in 2018.

Now, taxpayers in high tax states are gearing up for round two of the caps.

  • Legislators in states such as California, Connecticut, Illinois, New York, and New Jersey foresee a decline in property values as well as wealthy taxpayers leaving those states, and are currently formulating "work-arounds."
  • Some states are considering establishing state and local trust funds to take contributions for the support of public services. A taxpayer would then receive a state tax credit against SALT obligations.
  • Then the taxpayer would use the amount of the state trust fund contribution as a federal charitable income tax deduction to “work-around” the SALT limit.

Negatives:

  • The SALT limit is a central part of TCJA  to offset the inherent loss of federal income tax revenue built into other TCJA provisions.
  • Work-arounds have been described as  “an attempt to thwart the SALT limitation” and “a mere substitute for taxes that would have to be paid anyway.”
  • The IRS is doubling down, recently stating its intention to propose regulations addressing the federal treatment of payments made in return for a state tax credit.

See Susan P. Rounds, The SALT Work-Around: Shaken Not Stirred, NAEPC Journal of Estate & Tax Planning, Issue 29, July, 2018.

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

December 6, 2018 in Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Wednesday, December 5, 2018

Tax Amnesty Act: Senate vs. House Versions [Philippines]

PhilippinesIn the Philippines, House Bill (HB) 8554, the proposed "Tax Amnesty Act of 2018," was passed in the House of Representatives on November 20, while the Senate approved their own version of the bill as Senate Bill (S)B 2059 on November 19. The House's version was sponsored by House Ways and Means Committee Chairman Estrellita B. Suansing of the second district of Nueva Ecija, and the Senate's version was sponsored by Sen. Juan Edgardo "Sonny" Angara.

Both bills comprise three separate tax amnesty programs: an estate tax amnesty, a general tax amnesty and a tax amnesty on delinquencies. Taxpayers who avail themselves to any of the program protect themselves from the payment of taxes as well as any additional civil, criminal and administrative penalties under the National Internal Revenue Code (NIRC). Both bills provide under the estate tax amnesty program for an amnesty tax of 6% of the decedent's estate at the time of death for those that died in 2017 or earlier.

The bills differ in complexity on how they deal with the general tax amnesty. The House’s version is simpler, providing for an amnesty tax of 2% based on the taxpayer’s total assets as of December 31, 2017. In the Senate's version, the type of taxpayer becomes relevant to the amount of tax paid. For individuals, trusts and estates, the amnesty tax is 5% or P100,000, whichever is greater. For corporations, the amnesty tax is a flat rate of 5% as well as graduated amounts of minimum amnesty tax payments.

As for the tax amnesty on delinquencies, the House version provides that withholding agents are given the opportunity to settle their withholding tax obligations by paying 100% of the basic withholding tax deficiencies. This privilege is not available under the Senate version.

See Peaches Martinez-Aranas, Tax Amnesty Act: Senate vs. House versions, AtinitoNew.com, November 25, 2018.

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

December 5, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation, Travel, Wills | Permalink | Comments (0)

Tuesday, December 4, 2018

Article on The Tax Cuts and Jobs Act of 2017 (TCJA) and Its Impact on Investors, Their Trusts, Investment Entities, Retirement Plans and Estates -- Part 1 Tax Reform for Individuals

TaxlawDean Marsan recently published an Article entitled, The Tax Cuts and Jobs Act of 2017 (TCJA) and Its Impact on Investors, Their Trusts, Investment Entities, Retirement Plans and Estates -- Part 1 Tax Reform for Individuals, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

This article is the first of three parts (Part 1) and examines the Tax Cuts and Jobs Act of 2017 and its impact on investors and their investment entities, retirement plans, trusts and estates and also tracks its legislative history through Congress. This article focuses on the tax reform's impact on individuals and the second article submitted to SSRN discusses business tax reform (Part 2) and compensation reforms (Part 3).

December 4, 2018 in Articles, Current Affairs, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Valuable Estate Lessons from the Passing of George and Barbara Bush

BushPresident George H.W. Bush, the 41st President of the United States, passed away earlier this week. His death occurred a mere 8 months after his wife of 73 years, Barbara, died. While it may appear to be a romantic ending to their decades long relationship, the short time between their deaths can raise issues for their beneficiaries and make the estates' administrations more difficult.

“The statistics are high especially for older couples who had close marriages, dependent on each other,” says Paula Leibovitz Goodwin, partner in the Personal Planning Group at Perkins Coie LLP in San Francisco. While the quick succession of spouses' deaths is quite common, the time between can be critical as some survivorship provisions may require that a spouse survive for a specific amount of time. If the timing is close, for example less than two weeks apart, the two estates may be able to be probated contemporaneously.

This type of provision would not have benefited the Bushes. Reading the documents of both of the spouses carefully is vital to determine exactly how the assets would flow. “Does the estate pass from 1st spouse who died to survivor, and then from survivor to others, or does 1st spouse’s assets pass to their next level beneficiaries and surviving spouse’s assets pass to their next level beneficiaries?" Goodwin says.

With certain accounts, the other spouse is named beneficiary and others as contingent beneficiaries. If death occurs in quick succession, the second spouse to die likely had not yet rolled the first’s retirement account into their own account with beneficiaries. This would cause the retirement account to pass to probate with the first spouse's estate.

See Megan Gorman, Valuable Estate Lessons from the Passing of George and Barbara Bush, Forbes, December 3, 2018.

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

December 4, 2018 in Current Affairs, Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

How to Make Your Estate Plan Doomsday Ready

BombWith the news filled with stories of nature being on a rampage, it causes people that have never faced such a disaster to contemplate their own plans. What would they do if they lost everything in just one moment? How would they access the important information they needed to rebuild their life?

What type of information do you need to secure in the case of a natural disaster?

  • Account numbers and passwords.
    • For safety reasons, keep these two in separate areas.
  • Copies of legal documents.
    • This includes wills, trusts, power of attorneys, health care directives, and property deeds.
  • Contact information for your lawyer, accountant, insurance agents, and financial advisors.
    • Keeping copies of your insurance policies and tax returns can speed up the recovery process.
  • Medical information could be a literal life saver.
    • Have a complete list of all your prescriptions and contact information for your medical providers.     
  • Where to store the information?
    • Cloud based software, fireproof box, paper in wallet or purse

See Christine Fletcher, How to Make Your Estate Plan Doomsday Ready, Forbes, December 3, 2018.

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

December 4, 2018 in Current Events, Estate Planning - Generally, Wills | Permalink | Comments (0)

Monday, December 3, 2018

Article on Constructive Trusteeship: The Perils of Statutory Formulae

MarshallDarryn Jensen published an Article entitled, Constructive Trusteeship: The Perils of Statutory Formulae, Wills, Trusts, & Estates Law eJournal (2016). Provided below is an abstract of the Article.

This paper evaluates the provisions concerning constructive trusteeship in Trusts Act 1994 (Marshall Islands) and makes more general observations about the roles of constructive trusts in litigation involving trustees' breaches of duty, the roles of statute law and the risk inherent in attempts to express complex and multi-faceted private law concepts in statutory formulae.

 

December 3, 2018 in Articles, Estate Administration, Estate Planning - Generally, Travel, Trusts | Permalink | Comments (0)