Wills, Trusts & Estates Prof Blog

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

Monday, March 30, 2020

Congress Suspends Required Minimum Distributions for 401(k)s and IRAs for 2020, Opening Window to Tax Savings

IRAThe bipartisan COVID-19 stimulus bill recently signed by President Trump includes welcome tax relief for retirees: The required minimum distribution (RMD) rules for Individual Retirement Accounts and 401(k)s are waived for 2020. This is the same as what occurred in 2009 during the Great Recession. For retirees, this means that instead of taking money out of their IRA this year, their investments can continue to grow.

Of course, for retirees that depend on their RMD to pay for expenses, the waiver is moot. For others, there may be benefits to still take some money out. Ed Slott, a CPA and IRA expert in Rockville Centre, New York, says “There are opportunities here. You might want to look at your tax bracket and get money out at low rates. If anything is obvious, it’s that tax rates are going to go higher.” 

The rules for who was required to take 2020 RMDs were already altered because of the SECURE ACT, passed in late December, which changed the age triggering RMDs from 70 ½ to 72, effective January 1, 2020. Children, grandchildren and others who have inherited IRAs (pretax IRAs and Roth IRAs) must take annual withdrawals regardless of their own personal age. If you have already received a distribution from your own IRA or one inherited from a spouse for 2020, you can roll it back into your IRA within 60 days of receipt.

See Ashlea Ebeling, Congress Suspends Required Minimum Distributions for 401(k)s and IRAs for 2020, Opening Window to Tax Savings, Forbes, March 27, 2020.

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

March 30, 2020 in Current Affairs, Estate Planning - Generally, New Legislation, Non-Probate Assets | Permalink | Comments (0)

Sunday, March 29, 2020

Article on Reconceptualising the Law of the Dead by Expanding the Interests of the Living

BookofthedeadKate Falconer recently published an Article entitled, Reconceptualising the Law of the Dead by Expanding the Interests of the Living, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

Despite its name, the Australian law of the dead — a term used here to refer to the common law governing the treatment and disposal of the body of a deceased person — has extraordinarily little to do with the recently deceased. Instead, it is traditionally (and narrowly) conceptualised from the perspective of the still-living, with post-death disputes — such as those relating to posthumous interferences with the corpse — being decided by reference to the person who holds the right to possession of the body of the deceased. In contrast, whilst her physical shell continues to play a role at law, from the moment of death onwards the deceased as a person is denied legal existence in the form of rights, interests, or duties. This paper challenges this traditional formulation of the law of the dead by bringing the interests of the deceased to the forefront. It does this by arguing that the law of the dead should be reconceptualised so that the holder of the right to possession of the body of a particular deceased person is considered to experience an expansion of their own personal set of interests; this expansion being equivalent to those interests held by the deceased in relation to her body during her life and continuing into a 'posthumous space' after her death.

March 29, 2020 in Articles, Death Event Planning, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0)

Saturday, March 28, 2020

CLE on Adult Guardianships: How to Bring and Defend an Action

CLEThe American Law Institute is holding a webcast entitled, Adult Guardianships: How to Bring and Defend an Action, Tuesday, April 28, 2020 from 12:00 to 1:30 PM Eastern. Provided below is a description of the event.

Why You Should Attend

Guardianship is a valuable tool for enabling one person to make decisions on behalf of someone incapacitated or disabled. The potential need to establish adult guardianships may be more in demand in the future as the baby boomer generation continues to age and individuals with developmental disabilities reach adulthood.

In just 90 minutes, this webcast provides a valuable opportunity to learn the essentials of adult guardianship practice, including how these cases are brought and the various factors that practitioners need to take into account when bringing or defending a guardianship action.

What You Will Learn

Taught by experienced estate planners and ACTEC Fellows, this webcast explores the essential aspects of an adult guardianship, including:

    • Whether a guardianship is necessary
    • Full plenary vs. limited guardianship
    • How the initial pleadings might vary depending on whether it appears that the guardianship action will be unopposed or contested
    • The role of the court appointed attorney and how counsel should deal with the court appointed attorney
    • When a guardian ad litem should be requested and what standards the court should use in determining whether to appoint one
    • How the role of the guardian ad litem differs from the role of the court appointed attorney
    • The evidentiary standard for proving that an alleged incapacitated person lacks capacity
    • What factors the court takes into account when choosing the person to serve as guardian
    • Pros and cons of having a professional guardian serve as opposed to a family member or friend of the incapacitated person
    • Abuses in the guardianship system

All registrants will receive a set of downloadable course materials to accompany the program.

 

Who Should Attend

Estate planners and those practicing in elder law will benefit from this CLE on adult guardianships jointly offered by ALI CLE and ACTEC.

March 28, 2020 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Ford Heirs Lose Battle to Oust Mother’s Allegedly Abusive Caregiver

DurossThe heirs to Henry Ford II - the eldest grandson of legendary Henry Ford - filed a legal challenge against their late patriarch's attorney, Frank Chopin, who is now the champion of Ford's widow, Kathleen DuRoss Ford, 80. They claimed that the man tried to control their access to her and, abused her by “[forcing] pills down her throat.” Chopin, who has power of attorney over the widow's affair, denies the allegations.

On Wednesday, a Palm Beach judge denied their request to have Chopin removed as her caregiver, and leaving her daughters, grandchildren and even her sister, Sharon, 82, distraught. Tara DuRoss, a 23-year-old granddaughter of Ford's, claimed Chopin had limited them to scheduled conference calls and meetings away from her home, and now the calls had stopped. “I used to call her every day. We just want to be able … to see her.”

Chopin remarked that it is untrue that Tara spoke to Kathleen daily. He called her an “idiot child,” and said the family were “estranged” unless “they wanted something.”

See Oli Coleman, Ford Heirs Lose Battle to Oust Mother’s Allegedly Abusive Caregiver, Page Six, March 26, 2020.

Special thanks to Reid Weisbord (Professor of Law and Judge Norma L. Shapiro Scholar, Rutgers Law) for bringing this article to my attention.

March 28, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Friday, March 27, 2020

Can You Sue Someone If You Get Coronavirus?

Covid2History has shown us that many cases have been successfully brought concerning transmission of viruses or infectious disease, including during a pandemic. These past lawsuits pertaining to Ebola, H1N1 (swine flu), and HIV/AIDS, and can serve as an indication of whether you can sue a person or entity if you contract the novel coronavirus - COVID-19.

Several courts have ruled that a person has a claim against someone who passes on the HIV/Aids virus. The California Supreme Court in John B. v. Superior Court ruled that suits regarding the negligent transmission of sexual diseases, such as the HIV/AIDS virus, can proceed based on constructive knowledge. Indeed, because of the nature of the virus, some states have criminalized the transmission of HIV/AIDS.

The Supreme Court of Texas, in a February 2020 opinion, Coming Attractions Bridal and Formal, Inc. v. Texas Health Resources, addressed exposure to Ebola in a claim brought under the Texas Medical Liability Act. A nurse of a Dallas hospital helped care for a patient infected with Ebola, then went to Ohio to shop at a bridal shop. Once she returned to Dallas, she became ill and later diagnosed with Ebola herself. The bridal shop claimed the hospital where the nurse worked was negligent for failure to prevent transmission of the Ebola virus to the nurse and alleging that the hospital’s negligence caused the shop to close due to health concerns and adverse publicity because of the virus. The case was dismissed due to failure to file an expert report, not due to failure to state a claim. Another Ebola case in Texas was remanded for further proceedings.

In Ebaseh Onofa v. McAllen Hospitals, a 2015 Texas Court of Appeals case, husband alleged that his wife returned from her shift at the hospital not feeling well. The hospital had confirmed cases of H1N1 virus (swine flu) in the hospital. She admitted to the emergency room a few days later and died just two days after that. The husband sued for wrongful death because the wife was not offered an N95 mask and the court granted the hospital summary judgement. The appellate court affirmed, concluding that the husband  "produced nothing more than speculation on the element of causation" because there were no positive H1N1 patients in the wife's unit. Therefore, although it was possible that the husband could sue for his wife’s contraction of the virus, he had to present some evidence of causation to survive summary judgment.

See Can You Sue Someone If You Get Coronavirus?, Probate Stars, March 26, 2020.

March 27, 2020 in Current Affairs, Estate Planning - Generally, New Cases, Science | Permalink | Comments (0)

Thursday, March 26, 2020

Americans are Rushing to Make Online Wills with 143% Uptake During Coronavirus Outbreak - But Lawyers Warn Some Might be Invalid

WillAs of Wednesday, March 26, 2020, there have been 823 deaths linked to the novel coronavirus in the United States and over 60,000 confirmed cases. Spreading faster than the virus itself may be people's realization of their mortality, as many Americans are rushing to their computers to make digital wills.

Online will company Gentreo told CNBC they have seen a 143% week on week increase in business; Trust & Will has seen a 50% rise. Around 40% of Americans are thought to currently have wills place. Attorney Alain Roman, who assists with estate planning, said "Seeing in the news that so many people are passing away worldwide and here in the U.S., people are getting a little scared. It’s getting them thinking about having a plan in place in case something happens to them."

But legal experts have a warning for those signing wills online: be wary of their legality. Leslie Tayne, founder of Tayne Law Group, said the digital document will only be valid if it "meets all of the legal requirements of your state." Tayne added that "since the vast majority of DIY wills are created and executed without any oversight from an attorney, a larger number of wills (may not be) executed in compliance with the proper will formalities, and that could end up making the will invalid."

See Lauren Fruen, Americans are Rushing to Make Online Wills with 143% Uptake During Coronavirus Outbreak - But Lawyers Warn Some Might be Invalid, Daily Mail, March 25, 2020.

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

March 26, 2020 in Current Affairs, Current Events, Disability Planning - Property Management, Estate Planning - Generally, Technology, Wills | Permalink | Comments (0)

Article on Wealth Transfer Tax Planning after the Tax Cuts and Jobs Act

TcjaJohn A. Miller and Jeffrey A. Maine recently published an Article entitled, Wealth Transfer Tax Planning after the Tax Cuts and Jobs Act, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article.

On December 17, 2017, Congress passed the Tax Cuts and Jobs Act (TCJA). Among its many impacts, the TCJA increased the inflation adjusted estate tax basic exclusion amount to $10,000,000 on a temporary basis. This has dramatic implications for many existing and future estate plans, including a major crossover impact on income tax planning. In this article we explain the operation of the federal wealth transfer taxes (the estate tax, the gift tax and the generation skipping transfer tax) in the wake of the TCJA and of the newly issued regulations interpreting the TCJA changes. We also explain the basic tax planning techniques for wealth transmission. The overall design of this article is to bring the reader into the current wealth transfer tax planning picture while providing references to more detailed treatments of particular topics within this broad field.

March 26, 2020 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Hospitals Consider Universal Do-Not-Resuscitate Orders for Coronavirus Patients

CodeblueThe COVID-19 pandemic is raging in hospitals across the country, and along with it is a stark conversation: how to weigh the “save at all costs” approach to resuscitating a dying patient against the real danger of exposing doctors and nurses to the contagion.  The debate is being driven by the knowledge that the risk to staff amid dwindling stores of protective equipment — such as masks, gowns and gloves — may be too great to justify the conventional response when a patient “codes,” and their heart or breathing stops. When a code blue alarm is activated, it signals that a patient has gone into cardiopulmonary arrest and typically all available personnel — usually  eight but could be as many as 30 people — rush into the room to begin live-saving procedures without which the person would almost certainly perish.

Administrators at a number of hospitals are discussing a universal do-not-resuscitate policy for infected patients, regardless of the wishes of the patient or their family members — a  truly gut-wrenching decision to prioritize the lives of the many over the one. Northwest Memorial Hospital in Chicago asked Illinois Govenor J.B. Pritzker for assistance in clarifying state law and whether it permits the policy shift. The University of Washington Medical Center in Seattle, one of the country’s major hot spots for COVID-19 infections, is dealing with the problem by severely limiting the number of responders to a contagious patient in cardiac or respiratory arrest.

Lewis Kaplan, president of the Society of Critical Care Medicine and a University of Pennsylvania surgeon, described how colleagues at several institutions are sharing drafts of their shifting policies to address their changed reality. “We are now on crisis footing,” he said. “What you take as first-come, first-served, no-holds-barred, everything-that-is-available-should-be-applied medicine is not where we are. We are now facing some difficult choices in how we apply medical resources — including staff.”

See Ariana Eunjung Cha, Hospitals Consider Universal Do-Not-Resuscitate Orders for Coronavirus Patients, Washington Post, March 25, 2020.

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

March 26, 2020 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, March 25, 2020

Daniel Craig Says he Doesn't Plan to Leave his Fortune to his Kids: 'Get Rid of it or Give it Away Before you Go'

CraigDaniel Craig, the actor currently portraying the popular fictional character James Bond, recently said in an interview that he is not planning any of his $100 million to his children. He has an infant daughter, born in 2018, with actress wife Rachel Weisz, as well as older daughter Ella, who is in her 20s, from his previous marriage. He is also stepfather to Weisz’s 13-year-old son Henry.

Craig is far from the first celebrity to announce that he does not want to raise his children to depend on their parents for money. Elton John, along with his husband David Furnish, said in 2016 that they would be giving the bulk of their estates to charity rather than to their two sons. Simon Cowell, told the Mirror back in 2013 that he’s “going to leave my money to somebody. A charity, probably — kids and dogs. I don’t believe in passing on from one generation to another."

The next James Bond movie, No Time to Die, originally scheduled for release in April, but now delayed until November.

See Daniel Craig Says he Doesn't Plan to Leave his Fortune to his Kids: 'Get Rid of it or Give it Away Before you Go', Wealth Advisor, March 24, 2020.

March 25, 2020 in Current Events, Estate Administration, Estate Planning - Generally, Film | Permalink | Comments (0)

Planning Amid Turmoil: 6 Gifting and Tax Strategies for the Current Environment

StockmarketMany investors may seem powerless with the market in such turmoil with heightened volatility and falling interest rates. The truth is that there are still many things one can control in this environment, including opportunities to provide for one's family and others that do not come around very often.

  • Donate to Support Your Communities
    • In 2020, you can deduct up to 60% of your adjusted gross income for gifts made to a public charity, and these deductions can offset normal earnings, such as salaries and bonuses, as well as dividend and interest payments and even capital gains.
  • Help Family Members Ride Out the Storm
    • Under the gift tax annual exclusion, an inidividual can give up to $15,000 in 2020 to each recipient without tax consequences, and for a married couple, the total is $30,000 per recipient.
  • Provide Long-Term Support by Using Your Exemption Amounts
    • Giving away assets that a person expects to appreciate as values recover makes use of their exemption while also shifting that appreciation to the next generation.
  • Use GRATs and CLTs to Make Additional Tax-Free Gifts
    • Grantor Retained Annuity Trusts (GRATs) and Charity Lead Trusts (CLTs) allow a person to pass the appreciation in the value of assets over a hurdle rate set by the IRS to their beneficiaries tax-free. Currently, the IRS hurdle rate is 1.8% and in April, the rate will drop to 1.2%. 
  • Refinance Your Debt and Family Loans
    • With interest rates at rock-bottom levels, it could make sense to refinance existing debt obligations such as a home mortgage and reduce the interest rate on any loans made to family members.
  • Convert Your Traditional IRA to a Roth
    • Since the taxes resulting from a conversion are based on the IRA’s balance at the time of conversion, depressed market prices help reduce the tax liability if an individual decides a ROTH conversion makes sense.

See Bryan Kirk, Planning Amid Turmoil: 6 Gifting and Tax Strategies for the Current Environment, Fiduciary Trust, March 18, 2020.

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

March 25, 2020 in Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)