Wills, Trusts & Estates Prof Blog

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

Monday, June 29, 2020

Provident 1031 Offers Accredited Investors Delaware Statutory Trust Properties For 1031 Exchange

Delaware-Statutory-trust-1920x700Land and commercial property sellers across the US know how to defer tax when selling property using a 1031 Exchange and today investors have more options than ever. One of these options is the Delaware State Trust (DST). 

A DST is a unique investment opportunity that allows an investor to invest in partial ownership in large institutional grade commercial properties and earn monthly tax favored cash flow without the headaches of managing property. Also, investors reap the benefits of differing taxes by using a 1031 Exchange and can preserve the widely favored step up in basis at death. 

DST's now qualify as "like kind" properties according to third party qualified Intermediaries (QI's) who act as escrow agents and facilitators for test exchanges. These opportunities can offer life changing benefits to owners of real estate who are aging and no longer want to or are able to manage/own properties. 

Provident 1031's website helps commercial property sellers of multifamily, hotels, retail spaces, raw land, rental homes, or industrial complexes to identify DST properties and the accompanied use of the 1031 Exchange.

This also allows sellers of property to save/defer taxes, protect their step up in basis, generate monthly income, and gain freedom from tenants, loans, personal liability, cash calls and most of the generated headaches and risks that go along with investment properties. 

See, Provident 1031 Offers Accredited Investors Delaware Statutory Trust Properties For 1031 Exchange, Digital Journal, June 19, 2020.

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

June 29, 2020 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Sunday, June 28, 2020

‘They Just Dumped Him Like Trash’: Nursing Homes Evict Vulnerable Residents

Elderly_Male_Wheelchair_Mask_1296x728-headerNursing homes across the country are kicking out old and disabled residents and sending them to homeless shelters and rundown motels. 

On a cold afternoon in April, Los Angeles police found an old and disoriented man crumpled on a Koreatown sidewalk. RC Kendrick, an 88-year-old with dementia, was living at Lakeview Terrace, a nursing home with a history of regulatory problems. His family had placed him there to make sure he got round-the-clock care after his condition deteriorated and he began disappearing for days at a time.

However, on April 6, the nursing home placed Kendrick at an unregulated boarding house, without informing his family. Less than 24 hours later, Kendrick was wandering the streets alone.

More than any other institution in America, nursing homes have come to symbolize the deadly destruction of the coronavirus crisis. More than 51,000 residents and employees of nursing homes and long-term care facilities have died, representing more than 40 percent of the total death toll in the United States.

A Lakeview official said the company’s evictions were appropriate and weren’t an attempt to free space for Covid-19 patients. Yet, similar things are happening at nursing homes across the country. They are just dumping old and disabled residents, who are among the most vulnerable to the virus, in homeless shelters, rundown motels, unregulated boarding houses, and even the streets. 

Many of the evictions, known as involuntary discharges, appear to violate federal rules that require nursing homes to place residents in safe locations and to provide them with at least 30 days’ notice before forcing them to leave.

The pandemic has intensified the situation.

With nursing homes not allowing visitors, there is less outside scrutiny of their practices. Fifteen state-funded ombudsmen said in interviews that some homes appear to be taking advantage of that void to evict vulnerable residents.

Many nursing homes are struggling financially as post-surgery rehab has withered away due to the non-essential restrictions placed on facilities. Therefore, treating COVID-19 patients quickly has become a popular way to fill that void. 

Keep an eye on your loved ones!

See Jessica Silver-Greenberg & Amy Julia Harris, ‘They Just Dumped Him Like Trash’: Nursing Homes Evict Vulnerable Residents, N.Y. Times, June 23, 2020. 

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

June 28, 2020 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Saturday, June 27, 2020

XXXTentacion's Mom Sued for $11M by Half Bro, Claims She Stole from Trust

UnknownIt has been two years since XXXTentacion's (XXX) passing, but the drama storm continues to brew, as his half-brother is suing XXX's mother, claiming she stole from his Trust. Jodi Kavney, the mother of XXX's half-brother, Corey Pack, claims that Cleopatra Bernard, created a plan to siphon off millions of dollars from her own son's trust—money that the rapper set aside for Corey. 

Jodi, who's suing on behalf of Corey, says in docs, XXX left behind assets in excess of $50 million ... including a trust that lists Corey as 1 of 3 beneficiaries. In the lawsuit, Jodi claims Cleopatra cut a deal with XXX's baby mama which helped her cut Corey out of his portion of the estate. Jodi's now seeking to recover assets she claims were "improperly and surreptitiously transferred" by Cleopatra to herself.

Jodi's suing for $11 million in damages and may try to triple that amount ... if she can prove this was intentionally done. She also claims Corey's entitled to ownership rights to XXX's record label, Bad Vibe Entities.

In a recent update in the case, Bernard's attorney, Michael Simon, told TMZ that the lawsuit that was filed was completely without merit as a court has already determined that Corey Pack is entitled to nothing from XXX's estate or trust. 

Cleopatra has not only paid Corey’s living expenses and purchased him a car, but she has gifted to him and his mother, Jodi Kavney, a mortgage free home and paid the current year’s real estate taxes.

See XXXTentacion's Mom Sued for $11M by Half Bro, Claims She Stole from Trust, TMZ, June 19, 2020. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

June 27, 2020 in Estate Administration, Estate Planning - Generally, Music, Trusts | Permalink | Comments (0)

Article on Proposed Technical Corrections for Cash-Flow Relief Provisions of the Cares Act for Individuals with Savings or Retirement Benefits

Albert Feuer recently published an Article entitled, Proposed Technical Corrections for Cash-Flow Relief Provisions of the Cares Act for Individuals with Savings or Retirement Benefits, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article: Unknown

The CARES Act provides cash-flow relief for individuals who want to access their savings and retirement plan benefits without adverse tax consequences. There are significant outstanding issues with those provisions. The article discusses and proposes technical corrections to address three such issues.

• Is there a single certification procedure to determine who is eligible to access their own savings and retirement benefits? The HEROES Act, the multi-trillion-dollar proposal to supplement the CARES Act that the House of Representatives approved in mid-May, addresses this issue differently than both the IRS guidance and the article’s proposal.

• Are those eligible to so obtain their own benefits defined sufficiently broadly? The HEROES Act broadens the eligibility for the Covid-19 enhanced family and medical care leave relief. The Act does not address the far narrower CARES Act eligibility criteria for individuals who wish to access their own savings and retirement benefits.

• Is there an unambiguous and intuitive method to determine the new amortization schedule for an eligible individual who wishes to take advantage of the CARE Act deferral of 2020 due dates for plan loans? The HEROES Act, again, does not address this issue.

The article also proposes a state law change to prevent adverse state and local personal income tax consequences for plans, participants, and beneficiaries who wish to take advantage of the cash-flow relief of the CARES Act to access their own savings and retirement benefits. For example, the CARES Act permits in-service distributions that would otherwise cause savings and retirement plans to lose their tax-exemption. State and local tax laws that are not coupled with the Internal Revenue Code may tax plans that decide to provide such cash-flow relief, and also prevent participants and beneficiaries from deferring tax on their plan benefits. The article therefore presents a technical correction to state and local personal income tax laws that conformed to the Code before the enactment of the CARES Act, such as those of New York State, to assure that those laws conform to the Code provisions changed by these relief provisions and only those provisions.

June 27, 2020 in Articles, Current Affairs, Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Friday, June 26, 2020

Probate: 10 Things You Need to Know

D1b06968-9e75-448e-b9d6-372338f3d838Below is a summary of a UK article that offers a few tips on sorting out financial affairs during the global pandemic. 

Unfortunately, the pandemic means that many people that have agreed to be named as executor on a friend or family member's will years ago, will have to step up and do their duty and apply for probate. 

Financial Times asked their readers to tell them about their experiences navigating the Probate system and from that put a list of 10 things that should be considered when going through probate.

Here are the 10 things you should know about Probate:

1.  Don’t leave your executors in the dark

If you are named as an executor on a family member or friends will, speak with them about their financial situation while they are still alive.

2. Record every detail

Keep a detailed record of everything you know about the financial situation to ensure a smooth transition.

3. Be prepared for delays

Be ready for any hiccups that may occur throughout the process so that you are not caught by surprise and put in a bind.

4. Get lots of death certificates

You're going to need these, as almost everyone you have to go through (banks, etc.) will likely ask for one.

5. Lasting Power of Attorney

Be aware that a Lasting Power of Attorney (LPA) only remains valid during the person’s lifetime.

6. The seven-year glitch

Several readers found they needed at least seven years of bank statements to check for gifts made before death.

7. Inheritance tax deadlines

The deadline for any payment of inheritance tax due is six months from the end of the month of death

8. Negotiate legal costs

Many readers stressed that deals can be done and that relatives should not be afraid of negotiating with solicitors or estate agents.

9. Valuing assets can be costly

It is also worth challenging the cost of asset valuations.

10. Protecting the estate after death

Any valuable assets need to be removed and the property needs to be maintained so that it is not obvious that it is empty.

See Lindsay Cook, Probate: 10 Things You Need to Know , Financial Times, June 19, 2020.

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

June 26, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Article on The Pension Trust: Fit for Purpose?

M. Scott Donald recently published an Article entitled, The Pension Trust: Fit for Purpose?, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article: Unknown

The law of trusts plays an integral and multi‐faceted role in the regulatory scheme shaping the occupational pensions arena in Australia and the United Kingdom. It facilitates the operation of private law modalities, such as innovation and competition. However, that openness also renders members’ interests vulnerable and the lack of transparency and emaciated accountability mechanisms within trust law undermine the powerful normative force exerted by the language in which trust doctrine is so often couched. That said, the regulatory regimes buttress, and rely upon, the protections offered by trust law. The result is a compelling illustration of the nuanced way in which private law is employed in a modern regulatory state.

 

June 26, 2020 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Thursday, June 25, 2020

Opportunities Abound for Wealth Transfer

UnknownDue to COVID-19, it has been a rough year for investments. Further, the first-quarter pullback in the stock market created continued volatility which has added insult to portfolios. 

However, the gloomy climate has opened up some rare opportunities in another area of wealth planning: wealth transfer. The low interest rates and reduced asset prices combined with the ultrahigh estate tax exemption that was enacted under the Tax Cuts and Jobs Act in 2018 create a perfect storm for maximizing the amount you can pass to beneficiaries while avoiding or minimizing a tax hit.

“If you’ve been wanting to transfer a bunch of securities or interest in your company or real estate, well, now’s the time to do it,” says Bryan Kirk, director of financial and estate planning at Fiduciary Trust International.

For those worried about estate tax, you can push more assets out of your estate under the exemption when values are low, Kirk says, adding that large assets are typically transferred to a generic irrevocable trust to ensure they’re managed properly and protected from creditors or spendthrift heirs.

Further, even families who aren’t concerned with the estate tax can benefit from low-value asset transfers. One way to do this is a grantor retained annuity trust (GRAT), which returns the value of the assets to you when the trust expires but leaves appreciation to your beneficiaries.You transfer assets to a GRAT and receive an annuity payment over the trust’s term that’s equal to the amount you put in, plus appreciation up to an IRS interest rate. At the end of the trust’s term, any appreciation over the IRS rate—called the 7520 rate—goes to heirs.

See Karen Hube, Opportunities Abound for Wealth Transfer, Barron's, June 18, 2020. 

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

June 25, 2020 in Current Events, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax | Permalink | Comments (0)

Article on Inheritance of Full Sister/s with Consanguine Brother/s in Pakistan: A Critical Analysis of Saadullah v Gulbanda

Shahbaz Ahmad Cheema recently published an Article entitled, Inheritance of Full Sister/s with Consanguine Brother/s in Pakistan: A Critical Analysis of Saadullah v Gulbanda, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article: 182667184-56a636213df78cf7728bd987

In Pakistan, Hanafi version of Islamic law of inheritance is followed by the courts in view of overwhelming number of Sunni Hanafi Muslims unless proved otherwise. Despite accurate appraisal of Islamic law of inheritance by the superior courts in general, one specific issue has been causing problem for last many years. In Saadullah v Gulbanda (2014 SCMR 1205), the Supreme Court excluded consanguine brother from inheritance in presence of full sisters that stirred debate about entitlement of those residuaries who are remotely related to deceased than full sister/s. This judgment is based on the faulty appraisal of Islamic law of inheritance by misreading the chart of residuaries prepared by D. F. Mulla’s Principles of Muhammadan Law. Case law analysis in the article reveals that, prior to the above mentioned case, the courts appreciated the analogous matters more accurately. The article presents correct perspective of Islamic law of inheritance on the subject with an expectation that the Supreme Court would revisit its erroneous approach for the protection of inheritance rights of eligible legal heirs.

June 25, 2020 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Trust Parties’ Uniquely Easy Access to Rescission: Analysis, Critique and Reform

Adam Hofri-Winogradow and Gadi Weiss recently published an Article entitled, Trust Parties’ Uniquely Easy Access to Rescission: Analysis, Critique and Reform, Wills, Trusts, & Estates Law eJournal (2020). Provided below is the abstract to the Article: Trust-law-800x600

Parties to trusts currently enjoy easier access to judicial avoidance of voluntary dispositions resulting from mistakes and inadequate decision‐making than other persons. The principal doctrinal basis for this advantage has shifted from the rule in Re Hastings‐Bass to rescission in equity. The article argues that this advantage is normatively unjustified, and recommends a uniform legal framework to govern the avoidance of voluntary dispositions resulting from mistakes or inadequate decision‐making, whether or not a trust was involved. Under this framework, dispositions resulting from laypersons’ mistakes and inadequate decision‐making should be avoided, subject to appropriate defences, whenever that causative nexus is present, while dispositions resulting from professionals’ mistakes and inadequate decision‐making should only be avoided where the mistake or deliberative flaw was so serious as to render the transferee's retention of property transferred unjust.

June 25, 2020 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Wednesday, June 24, 2020

Court of Appeals Affirms That Will Was Product of Undue Influence

Undue+influenceLast week, the Indiana Court of Appeals affirmed judgment in favor of daughters who contested their father’s last will and testament on the basis that he lacked testamentary capacity and was unduly influenced by his wife. In Moriarty v. Moriarty et al, the trial court declared the purported will to be invalid, ordered the return of several non-probate transfers, and directed that the decedent’s estate be distributed as an intestate estate.

Cathy and Paula were the only daughters of the decedent, William and his wife of 58 years, Doreen. Their mother passed away in April 2016. William was diagnose with depression, anxiety, and congestive heart failure after Doreen died. Eve met William while Doreen was still alive and began dating him within weeks after Doreen's death. Afterward, Cathy and Paula noticed a marked change in their relationship with their father, though they did not learn of his and Eve’s relationship until soon before they were married.

Following their wedding, Eve continued to isolate William from his daughters. In fact, Paula did not meet Eve until the day before William died. The daughters were no longer permitted to participate in his medical care, as they had previously done. Eve even fired William’s long-time caregiver who had also cared for Doreen.

William's spending also changed drastically, he bought an extravagant home that was put in both he and Eve's names, even though Eve did not help pay for the home. 

Following a three-day evidentiary hearing and testimony from 15 witnesses, the trial court issued a 28-page order with more than 250 findings and conclusions. The trial court was convinced that Eve exercised undue influence over William due to multiple facts presented at trial, including the dramatic shift in his estate plan only one month before his death and Eve’s involvement in procuring his will and surrendering his life insurance policy.

The Court of Appeals’ opinion reaffirmed that trial courts have wide discretion in making factual determinations and weighing the credibility of witnesses in will contests.

See Sarah Jenkins and Jason M. Rauch, Court of Appeals Affirms That Will Was Product of Undue InfluenceFaegre Drinker, June 17, 2020. 

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

June 24, 2020 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)