Wills, Trusts & Estates Prof Blog

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

Monday, January 10, 2022

Article: Getting Into Equity

Samuel L. Bray and Paul B. Miller recently published an article entitled, Getting Into Equity , Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

For two centuries, common lawyers have frequently talked about a “cause of action.” But “cause of action” is not an organizing principle for equity. This Article shows how a plaintiff gets into equity, and it shows equity is shaped by the interplay of its remedial, procedural, and substantive law. Equity is adjectival, related to law rather than the other way around. Remedies, not rights, are what give it power. And for getting into equity, it is the grievance that is central. To insist on an equitable cause of action is to work a fundamental change in how a plaintiff gets into equity.

January 10, 2022 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Saturday, January 8, 2022

Article: Equity's Attribution Rules

Rachel Leow recently published an article entitled, Equity's Attribution Rules, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

Corporate attribution is the process by which acts and states of mind are attributed to companies to establish their rights, duties, and liabilities. Ever since Meridian Global Funds Management v Securities Commission [1995] 2 AC 500, it is widely accepted that corporate attribution is a highly context-specific process While a growing literature has been produced on the attribution rules which apply to statutes and in the common law, very little is known about equity’s attribution rules. This paper examines equity’s attribution rules in three areas: dishonest assistance, knowing receipt, and bona fide purchase. Each routinely requires the attribution of both acts and states of mind. Equity’s rules are then compared with those emerging from the common law cases. The paper concludes that equity’s attribution rules are, perhaps surprisingly, just the same as the common law’s. It also explains why.

January 8, 2022 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Friday, January 7, 2022

He Got $300,000 From Credit-Card Rewards. The IRS Said It Was Taxable Income.

Wealth taxThe IRS went after Konstantin Anikeev, an experimental physicist, after he exploited the difference between unlimited 5% rewards and lower fees on gift cards and money orders, a concept Anikeev learned about from personal-finance websites. 

Anikeev used American Express cards, the government's view that credit-card rewards aren't income, and his own willingness to spend time buying gift cards and money orders. Anikeev stated, "If one has a theory, one can test it experimentally. Some are easier to test. . .[o]thers require a Large Hadron Collider or something like that. But this one was a bit more accessible." 

Mr. Anikeev's $6.4 million in credit-card charges led to an Internal Revenue Service audit "and a finding that he and his wife had more than $310,000 in income that should have been taxed." 

Judge Joseph Goeke affirmed the IRS practice, which says that credit-card rewards are usually nontaxable income. For example, buying a sweater for $100 and getting a 5% reward is really a $95 purchase, as opposed to $5 of income. However, the judge did offer the IRS avenues for tougher enforcement. 

Anikeev took the government to court and received a split ruling from Judge Goeke, who ruled that rewards earned on purchases of Visa gift cards aren't taxable because the cards are products. Anikeev even brought a tub of gift cards to court as a demonstration, and according to his lawyer, Jeffrey Sklarz, "[The government] sort of picked a fight with the wrong person. . .They should have picked someone who was a hot mess."

See Richard Rubin, He Got $300,000 From Credit-Card Rewards. The IRS Said It Was Taxable Income., Wall Street Journal, March 7, 2021. 

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

January 7, 2022 in Estate Administration, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Wednesday, January 5, 2022

Article: Texas Estate Planning Judicial Update: Fall 2021 Edition

Gerry W. Beyer recently published an article entitled, Texas Estate Planning Judicial Update: Fall 2021 Edition, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

This article discusses recent judicial developments (second and third quarters of 2021) relating to the Texas law of intestacy, wills, estate administration, trusts, and other estate planning matters. The discussion of each case concludes with a moral, i.e., the important lesson to be learned from the case. By recognizing situations that have led to time consuming and costly litigation in the past, estate planners can reduce the likelihood of the same situations arising with their clients.

January 5, 2022 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 4, 2022

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

Albert Feuer recently published an article entitled, Is This the Time to Harmonize the Required Minimum Distribution Rules?, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

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.

January 4, 2022 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (3)

Monday, January 3, 2022

What will happen to Jeffrey Epstein’s $27.5M New Mexico ranch?

Estate planningNow that Jeffrey Epstein is dead, many are wondering what will become of the Zorro Ranch. The Zorro Ranch owned by Epstein is located near Santa Fe, New Mexico. The billionaires Zorro Ranch is known for being "shrouded in secrecy," but now that Epstein is gone new secrets may come to light. 

However, as of now, only Jeffrey Epstein and his accusers "know the dark details of what went on there. . ." An investigation by Nexstar's KRQE shed light on just how bizarre Epstein's operation was. 

KQRE's Gabrielle Burkhart asked New Mexico State Land Commissioner, Stephanie Garcia Richard, "To your knowledge, what was that land being used for?" Garcia Richard responded by saying, "[o]ne can only speculate and I have to tell you, Gabrielle, that my staff. . .you know this has been a difficult topic for us to tackle. . .Thinking about what state land might have been used for has been, you know, has been difficult." 

Almost immediately after Garcia Richard took office in 2019, she canceled a decades-long lease agreement the state had with Epstein for nearly 1,300 acres of grazing land.

According to records in Santa Fe County, portions of the Zorro ranch changed ownership "according to a mysterious deed filed in 2020." In the deed, ownership of Zorro Ranch was transferred from Epstein's company to Love and Bliss, a non-profit church for $200. 

Love and Bliss church are the same people that filed a fraudulent warranty deed in Florida for Epstein's Palm Beach mansion. 

Epstein's estate has taken court action against Love and Bliss, as their fraudulent deeds have clouded the Estate's ability to sell their properties. 

The Zorro Ranch is listed for $27.5 million and according to representatives of the estate, funds from the sale will go toward the regular administration of the estate. 

See Gabrielle Burkhart & Allison Giron, What will happen to Jeffrey Epstein’s $27.5M New Mexico ranch?, Everything Lubbock, January 2, 2022. 

January 3, 2022 in Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Sunday, January 2, 2022

Article: On Trusts, Angels, Morality and Fusion: Reply to My Critics

Irit Samet recently published an article entitled On Trusts, Angels, Morality and Fusion: Reply to My Critics, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

I am deeply grateful to the four commentators for engaging with my work in a deep and creative manner; tempting such outstanding scholars setting their inquisitive minds unto my work x is the best I could possibly ask for. Their thoughts set me unto new paths that correspond with the present book but move beyond it. There is no way I can do justice in this short piece to all the excellent points they raise in their critique. I therefore chose to write about four themes that recur in two or more of the papers: the place of the trust in my account of Equity, the extent to which equity sides with (moral) angles, whether the morality invoked by Equity is thick or thin, and the question to what extent Equity as it emerges from the book can be the subject of future fusion projects.

January 2, 2022 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Saturday, January 1, 2022

The Uniform Trust Code’s qualified-beneficiary concept confuses yet another court

Estate planningIn the matter of the Colecchia Family Trust, The litigation was focused on an irrevocable, income-only/use-only trust "under which the equitable property rights of remaindermen had vested ab initio." The Massachusetts Court of Appeals had to decide whether trustees were accountable to the remaindermen during the lifetimes of the current beneficiaries. The Court ultimately found that they were not. 

According to Charles E. Rounds, there are two major reasons why the Court made the wrong decisions: 

First, equitable non-possessory property rights in the remainder in corpus had vested ab initio. Second, the trustees had had a background overarching enforceable equitable duty to act in the interests of all beneficiaries, not just the current ones. See Massachusetts UTC §105(b)(2).

Apparently the Uniform Trust Code's qualified-beneficiary concept has been an issue for multiple courts, including the Appeals Court in Massachusetts. 

See Charles E. Rounds, Jr., The Uniform Trust Code’s qualified-beneficiary concept confuses yet another court, JD Supra, January 1, 2022. 

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

 

 

January 1, 2022 in Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (1)

Friday, December 31, 2021

Article: Trustee Decision-making in the Australian Superannuation Context

Tobias Barkely recently published an article entitled, Trustee Decision-making in the Australian Superannuation Context, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

The Australian compulsory superannuation system contains $AUD 3 trillion in funds, which is a substantial share of the personal wealth held in Australia. This means decisions made by superannuation trustees are important for everyone in Australia, both as beneficiaries and as participants in the Australian economy. The regulation of trustee decision-making, like the superannuation system as a whole, is founded on the equitable principles of trust law, but with an extensive overlay of legislative and regulatory intervention. Examining the regulation of decision-making in this context provides important insights into foundational trust law principles as well as a major component of wealth management in Australia.

December 31, 2021 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, December 30, 2021

Ring v. Harmon (2021)

Estate planning
In Ring v. 
Harmon, the Court of Appeal in California considered "an alleged loan scheme to drain equity out of a house held in a probate estate." 

When Awana Ring was 80 years old, she lost her daughter Vickie Atiyeh. Vickie left Awana a house when she passed away. According to Awana, her son and grandson developed a scheme to "swipe much of the equity in the house—an inside job without outside help. "

Awana's son Scott and grandson Zachary collaborated with a loan broker to pushed Away to be appointed as personal representative of Vickie's estate, and then baited Away into taking out a predatory loan at a rate of 10.99 percent. "Scott and Zachary took the loan proceeds for themselves while the loan broker received fees and an income stream on the loan." 

Although the San Bernardino County Superior Court found that Awana only had claims as a personal representative of Vickie's estate, since it was in that capacity that she received the loan. However, the Court of Appeal found that Awana's "dual position" as both personal representative and beneficiary was a "special circumstance that justified allowing her to sue based on her beneficial interest in the estate." 

See Ring v. Harmon (2021) (Cal.App.5th). 

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

December 30, 2021 in Elder Law, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)