Wills, Trusts & Estates Prof Blog

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

Wednesday, November 14, 2018

Paul Allen's Will Sheds Little Light on What Will Happen to Estate

PaulallenPaul Allen’s six-page will was filed with King County on October 24, the same day that his sister, Jody, was announced as his executor and trustee of his estate. His will did not provide as much clarification as anticipate, instead pointed to a living trust established decades ago. The disposition of the assets within the trust are not expected to be made public. Forbes has estimated his wealth at $20 billion.

Allen died on October 15 at age 65 from complications of non-Hodgkin lymphoma. He was a co-founder of Microsoft, owned the Seattle Seahawks, donated significantly to the arts community and scientific research, and ran the multifaceted Vulcan Inc., which reshaped the real-estate landscape of South Lake Union.

Jody Allen said last month that “I will do all that I can to ensure that Paul’s vision is realized, not just for years, but for generations.” Allen signed the will on July 18, with two Vulcan employees as witnesses.

See Rachel Lerman, Paul Allen's Will Sheds Little Light on What Will Happen to Estate, Seattle Times, November 8, 2018.

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this article to my attention.

November 14, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Podcast: Lending in the Probate Context

ACTEC_FoundationWhat is probate lending?  Hear from ACTEC Fellow Professor David Horton of Davis, California, on this topic in a recent ACTEC Trust & Estate Talk podcast entitled Lending in the Probate Context.

November 14, 2018 in Estate Administration | Permalink | Comments (0)

Tuesday, November 13, 2018

Article on Tax as Part of a Broken Budget: Good Taxes Are Good Cause Enough

TreasuryStephanie Hunter McMahon recently published an Article entitled, Tax as Part of a Broken Budget: Good Taxes Are Good Cause Enough, Tax Law: Tax Law & Policy (2018). Provided below is an abstract of the Article.

The federal budget is a myth. Despite being a myth, Congress uses the budget to limit its choices by linking its revenue-raising and spending powers under a federal debt ceiling. Through its self-imposed limits, Congress puts tremendous pressure on how it calculates its budget, and that calculation generally assumes any tax provisions will raise revenue when the law becomes effective. However, many tax provisions require additional direction to ensure they operate as the budgetary process expects. That task falls to the Treasury Department and the Internal Revenue Service (IRS) as a bureau of the Department. Consequently, limiting the production of tax rules that implement, interpret, and sometimes limit possible interpretations of tax statutes is problematic because their projected revenue is used to balance the budget. Nevertheless, these Treasury Department rules are under attack on the grounds that their issuance fails to comply with the Administrative Procedure Act (APA). The APA generally requires notice and comment for the promulgation of rules, a costly process in terms of time and agency resources. This Article argues that there should be a wider acceptance of the good cause exception for the speedier issuance of tax regulations and other IRS-level implementing materials in order to satisfy Congress’s revenue expectations.

November 13, 2018 in Articles, Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

CLE on Irrevocable But not Irredeemable: How to Fix or Modify a Trust

CLEThe American Law Institute is holding a webcast entitled, Irrevocable But not Irredeemable: How to Fix or Modify a Trust, on Wednesday, December 5, 2018 at 12:00 p.m. to 1:00 p.m. Eastern. Provided below is a description of the event:

Why You Should Attend

Your client undoubtedly had excellent reasons for creating an irrevocable trust in the first place. He may have created an irrevocable trust to protect his own assets from the hands of creditors. He may have created an irrevocable trust to provide funding for his children without giving them direct access to those funds. He may have created an irrevocable trust for transfer tax planning purposes. But as time passes, the terms of that trust may no longer suit the needs of your client or the trust beneficiaries. Fortunately, their irrevocable trust can likely be modified and brought up-to-date to suit their current needs.   This practical one-hour audio program will give you the tools to determine when an irrevocable trust can and should be modified, and teach you about various methods to modify the trust.  

What You Will Learn

Topics to be covered include:

Determining when a trustee should modify an irrevocable trust;

Understanding the techniques to modify the trust; and

Drafting irrevocable trusts in light of a possible modification in the future

  This program was originally presented on July 25, 2018. Faculty questions will be answered by email within two business days.   Need this information now? Purchase the on-demand course here. Questions submitted on-demand will be answered within two business days.  

Who Should Attend

Estate planning attorneys who are drafting and advising on irrevocable trusts.

November 13, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Monday, November 12, 2018

Corpse Hotels Cater to Japan's Waiting Dead

HotelJapan has seen an exponential increase in its aging population, and the reality of this statistic is that there has also been a significant increase in the number of the dead, with a record of 1.34 million last year. With the small country unable to bury their loved ones that passed on, families must cremate them. But in many urban areas there is a wait for crematories, often up to a full week.

In the interim, people are turning to corpse hotels, where their deceased family member can await cremation in tasteful, competitively priced comfort, and families can say farewell at their leisure.  Those moments can be conducted with the help of an automated coffin-retrieval system, which quietly trundles the correct casket up from the storage area. Gone are the sterile environments of morgues, instead replaced by private viewing rooms and even suites that resemble the first floor of a traditional Japanese home where families can dine together with a perspex coffin containing the body. Management is particularly proud of the miniaturized refrigeration unit that makes this possible.

Corpse hotels are attempting to ease the tide, as it is predicted that between now and 2040 the death toll will continue to rise to a peak of 1.7 millions annually.

See Leo Lewis, Corpse Hotels Cater to Japan's Waiting Dead, Financial Times, November 7, 2018.

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

November 12, 2018 in Current Affairs, Death Event Planning, Elder Law, Estate Planning - Generally, Travel | Permalink | Comments (0)

Article on Age, Time, and Discrimination

AgetimeAlexander A. Boni-Saenz recently published an Article entitled, Age, Time, and Discrimination, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Discrimination scholars have traditionally justified antidiscrimination laws by appealing to the value of equality. Egalitarian theories locate the moral wrong of discrimination in the unfavorable treatment one individual receives as compared to another. However, discrimination theory has neglected to engage seriously with the socio-legal category of age, which poses a challenge to this egalitarian consensus due to its unique temporal character. Unlike other identity categories, an individual’s age inevitably changes over time. Consequently, any age-based legal rule will ultimately yield equal treatment over the lifecourse. This explains the weak constitutional protection for age and the fact that age-based legal rules are commonplace, determining everything from access to health care to criminal sentences to voting rights. The central claim of this Article is that equality can neither adequately describe the moral wrong of age discrimination nor justify the current landscape of statutory age discrimination law. The wrong of age discrimination lies not in a comparison, but instead in the deprivation of some intrinsic interest that extends throughout the lifecourse. Thus, we must turn to non-comparative values, such as liberty or dignity, to flesh out the theoretical foundation of age discrimination law. Exploring this alternative normative foundation generates valuable insights for current debates in discrimination theory and the legal regulation of age.

November 12, 2018 in Articles, Current Affairs, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Discussing the Issue of Aging Parents

DinnerThe recent changes in the tax law may induce several families to bring up the uncomfortable topic of aging parents this holiday season. But these types of conversations can offset the possibility of any unpleasant surprises in the future.

The decision will ultimately be up to the parents, but even if children are to be the ones that bring up the subject, preparation and research should be done beforehand. Durable power of attorney, health care agent and executor are all positions that have certain responsibilities and requirements. Each one should be discussed with family members or close friends, or if those parties are not acceptable (or they decline), other arrangements should be considered.

A frank discussion of parental assets may make it easier for children to understand the overall planning objectives and decision-making process. An understanding of parental assets can also help with long and short term planning, ranging from tax strategies and charitable giving to options in the event of a long-term care illness. The increase in the standard deduction many people will no longer itemize deductions, and the increased federal estate tax exemption of $11,180,000 may make some charitable donations obsolete - for tax benefit purposes. Beneficiaries may also benefit from a step-up basis for highly appreciated assets, thus saving in capital-gains taxes.

See Kristin Shirahama, Discussing the Issue of Aging Parents, Financial Advisor, November 6, 2018.

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

November 12, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation, Wills | Permalink | Comments (0)

Tha Father of Marvel, Stan Lee, Dies at 95

SleeStan Lee, the beloved chief writer and editor of Marvel Comics, who was integral in the break-out success of the comic book industry, has passed away at the age of 95. An attorney for Stan Lee's daughter, J.C., confirmed the icon's death at Cedars-Sinai Medical Center in Los Angeles.

Stan Lee was a central player in the creation of Spider-Man, the X-Men, the Fantastic Four, Iron Man, the Hulk, Thor and the many other superheroes who are the embodiment of pop culture for numerous fans. Under Stan Lee's guidance, Marvel to made the characters feel human with insecurities, personalities, and flaws. Just as with his heroes and villains, Stan Lee presented himself as approachable with his gregarious, optimistic and alternately grandiose demeanor.

He was born Stanley Martin Lieber on December 28, 1922, in Manhattan to two Romanian immigrants and the family moved to the Bronx. Stan Lee wished to be a serious literature writer but was hired as an office gofer by a company writing pulp comics in 1940. He was paid $8 a week, but eventually was writing and editing stories for the business. 

After using several pseudonyms to give the impression that Marvel had a large stable of writers, he changed his name in the 1970s, essentially his first name split into the two syllables. Stan Lee wrote training manuals stateside in the Army Signal Corps while moonlighting as a comics writer during World War II, and he married his wife Joan in 1947, remaining married until her death last year. His daughter Joan Celia (J.C.) was born in 1950, and his daughter Jan was born in 1953 but sadly died three days after her birth.

Mr. Lee’s unwavering energy suggested that he possessed superpowers himself, minus the cape. I want to do more of everything I’m doing,” he said in With Great Power …: The Stan Lee Story, a 2010 television documentary. “The only problem is time. I just wish there were more time.”

See Jonathan Kandell & Andy Webster, Stan Lee, Superhero of Marvel, Dies at 95, New York Times, November 12, 2018; see also Alexander F. Remington, Stan Lee, Creator of Superheroes, Dies at 95, Washington Post, November 12, 2018.

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

November 12, 2018 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Sunday, November 11, 2018

Article on Abandoning Realization and the Transition Tax: Toward a Comprehensive Tax Base

Tax actHenry Ordower recebtly published an Article entitled, Abandoning Realization and the Transition Tax: Toward a Comprehensive Tax Base, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

The Tax Cuts and Jobs Act of 2017 imposed a tax, the “transition tax,” on as much as 31 years of undistributed, accumulated corporate income. This article focus on that transition tax as it evaluates the function and constitutionality of the tax and considers whether the transition tax might serve as a model for addressing the broader problem of deferred income in the United States. The article views the transition tax as joining the expatriation tax and other mark to market inclusion provisions in abandoning any pretext that there is continued vitality in the realization principle as something more compelling than any other longstanding and obsolescing tax principle. Recommending that Congress seize the Tax Cuts and Jobs Act moment and discard the general rule deferring the inclusion of gain in income through a realization requirement in favor of the annual marking to market of all the taxpayer’s property, the article models a general mark to market transition tax after the new transition tax on deferred foreign income. The proposal recommends inclusion of the net gain in taxpayers’ incomes at significantly reduced rates of tax, including one rate for liquid assets and a lower rate for illiquid assets and an opportunity to pay the tax in installments. Following the initial inclusion under this transition tax, gain and loss would be included annually consistent with comprehensive tax base definitions under an accrual system of taxation based on marking to market. Growth or decline in the value of taxpayers’ property would be taken into account income annually. In some instances permitting some taxpayers to defer payment of the tax until disposition of the property may be desirable but the continued deferral might incur an interest charge.

November 11, 2018 in Articles, Current Affairs, Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

New PLR Addresses Special Trustee's Power to Limit or Eliminate Testamentary General Power of Appointment

IrsThe IRS recently issued a private letter ruling addressing key issues with respect to an independent special trustee’s power under a trust instrument to limit or eliminate a testamentary power of appointment granted in favor of the primary trust beneficiary. Significant, the IRS acknowledged that a testamentary general power of appointment is not considered to be exercisable during the lifetime of the power holder.

The private letter ruling is particularly interesting in that certain trust assets that would otherwise be included in the Primary Beneficiary’s gross estate may now be excluded from the Primary Beneficiary’s gross estate if the special trustee exercises its power to limit or eliminate the Primary Beneficiary’s testamentary power of appointment.

The IRS accepted the taxpayer’s position that the power of appointment set forth in the trust agreement is conditioned upon the Primary Beneficiary dying before an independent trustee limits or eliminates the power of appointment. The result of this ruling is that if the independent trustee were to exercise its discretionary power under the trust agreement to eliminate the Primary Beneficiary’s testamentary power of appointment, then such power of appointment would not exist upon the Primary Beneficiary’s death, and the trust assets would not be included in the Primary Beneficiary’s gross estate.

See Ashley L. Gill, New PLR Addresses Special Trustee's Power to Limit or Eliminate Testamentary General Power of Appointment, Mitchell Williams Law, November 6, 2018.

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

November 11, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)