Wills, Trusts & Estates Prof Blog

Webinar: Supreme Court Holding in Connelly Requires that Redemption Agreements be Reconsidered

Join Peak Trust Company for a discussion of the Supreme Court holding in Connelly, which requires that redemption agreements be reconsidered. This webinar will be held on Monday, June 24, 2024 at 4 p.m. EDT.

On June 6, 2024, the U.S. Supreme Court issued a unanimous opinion on a closely held business valuation case that will have significant impact on many family and closely held businesses. Connelly v. United States, U.S., No. 23-146, Opinion 6/6/24. The case addressed the valuation of stock in a closely held business and held that the obligation of an entity to buy a deceased equity owner’s shares does not reduce the value of the insurance proceeds received by the entity to fund the buyout.

 

The Supreme Court’s ruling resolves the conflict between the Connelly case and Estate of Blount v. Commissioner which had reached the opposite conclusion. What should practitioners be telling clients now? Will every redemption agreement be adversely affected? Should redemption agreements be restructured as cross-purchase agreements? Should more insurance be purchased to address potential estate taxes? How will the reduction in the exemption in 2026 exacerbate the negative repercussions of Connelly?

In this webinar, we will discuss the Connelly decision, along with the following questions:

• Based on this new development, what should practitioners be telling clients now?  
• Will every redemption agreement be adversely affected?  
• Should redemption agreements be restructured as cross-purchase agreements instead? 
• Should more insurance be purchased to address potential estate taxes?  
• And finally, how will the reduction in the exemption in 2026 exacerbate the negative repercussions of Connelly?

Can't attend the webinar? Please register and a recording of the presentation will be sent to you.

Speakers: Jonathan G. Blattmachr, Prof. Mitchell Gans, Robert S. Keebler, and Martin M. Shenkman

Sponsors: Interactive Legal Systems (ILS), Peak Trust Company *This may constitute attorney advertising. *

No CPE, CLE, etc. is offered but a certificate of attendance will be provided.

 

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

 

Tax Court to Update to DAWSON Case Management System

The U.S. Tax Court has recently announced that it will soon make the transition from its current case management system to DAWSON (Docket Access Within a Secure Online Network). "DAWSON is named after former Tax Court Judge Howard A. Dawson, Jr., who passed away in 2016. . ."

Due to the new transition, the Tax Court's current w-filing system will become inaccessible beginning at 5:00pm EST on November 20, 2020. Also, all electronic files will become read-only. 

Cases will still be electronically viewable, but documents may not be e-filed and no orders or opinions are expected to be issued during the transition. 

It is likely that Tax Court judges will avoid setting deadlines during this period of transition due to the obstacles presented by doing so the "old-fashioned" way. 

DAWSON is expected to enhance the following features:

• Electronic filing of petitions and payment of filing fee
• More user-friendly interface
• Web-based, mobile-friendly and fully integrated system.

DAWSON is expected to bring a "significant upgrade" for Tax Court practitioners that will minimize delays and obstacles. 

See Jenny L. Johnson Ware, Andrew R. Roberson, & Kevin Spencer, Tax Court to Update to DAWSON Case Management System, McDermott Will & Emery: Tax Controversy 360, October 22, 2020. 

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

Partition Law Abuse

VICE, a mini-documentary series that airs on Showtime (it used to air on H.B.O.), recently produced an episode on partition law abuse that has impacted so-called heirs’ property owners (tenancy-in-common property that typically is transferred by way of intestate succession) and that episode has been airing on Showtime this month. See https://www.sho.com/vice/season/1/episode/5/quitting-wework-and-losing-ground-and-italys-darkest-hour (you can stream it from this link).

This episode highlights how partition law abuse has contributed to substantial property loss in the African American community and it references the Uniform Partition of Heirs Property Act (UPHPA). Professor Thomas Mitchell of Texas A&M University School of Law, the Reporter/principal drafter for the UPHPA, helped the producer as he developed the segment and was interviewed as the national expert on partition law/heirs’ property.

A number of law professors have asked if VICE might be able to make the episode on partition law abuse available to teachers for use in their courses. The producer responded that he can send a link to a professor individually which would expire in a few weeks and that he is raising the bigger question about making it more accessible to teachers with his executive producers. He also indicated he could supply DVD copies but that might be for a fee. Already, a number or professors who teach Property law have contacted the producer.

Please contact him directly if you are interested in getting access to the episode. His name is Lyle Kendrick and his email address is [email protected]. 

Note that 16 states (and the U.S. Virgin Islands) have enacted the UPHPA into law with Virginia becoming the most recent state. This makes the UPHPA approximately the 5^th most successful uniform real property act that the Uniform Law Commission ever has promulgated in its 128-year history (of about 40 such acts). In addition, the Florida legislature unanimously passed the UPHPA this spring and Governor DeSantis has indicated he intends to sign it into law sometime in the next several weeks. The Mississippi Senate has passed the UPHPA and the Mississippi House is considering the MS Senate bill at this time.

‘A Concise Restatement of Donative Transfers and Trusts’ Now Available

A Concise Restatement of Donative Transfers and Trusts is now available for purchase. This Restatement is a joint publication of the American Law Institute and West Academic Publishing. The title is a concentrated version of the Property and Trust Restatements. This is a great resource for those interested in learning about this particular area of law.

See ‘A Concise Restatement of Donative Transfers and Trusts’ Now Available, American Law Institute, June 30, 2017.

Tax Tasks to Complete Before the End of 2016 in Light of Trump's Election

In light of Donald Trump’s election and his pre-election tax platform, you should consider several tax planning strategies as part of your year-end planning. McManus & Associates have listed the ten items below to complete before the end of 2016.

1. Accelerate your income tax deductions.
2. Postpone receipt of income.
3. Do not buy any capital assets this year.
4. Make gifts to charities and family foundations with appreciated assets.
5. Harvest losses to offset capital gains.
6. Establish and fund qualified plans.
7. Identify assets and amounts to make proper GRAT distributions before April 17, 2017.
8. Make annual exclusion gifts to chosen loved ones of $28,000 (per married couple).
9. Make distributions of income from trust accounts and estate accounts to lower the income tax liability.
10. Host annual meetings for your family office, partnerships and foundations.

 See Top 10 Tax Planning Tasks to Complete Before the End of 2016 in Light of President-Elect Trump’s Proposals, McManus & Associates, November 16, 2016.

Special thanks to Lauren DuBois (Media Inquiries, McManus & Associates) for bringing this article to my attention.  

Guide to Surviving Spouse Rights in Florida

Jeffrey Skatoff recently published an Article entitled, Guide to Surviving Spouse Rights in Florida, Florida Probate Lawyers (November 15, 2016). Provided below is a summary of the Article:

Florida law grants surviving spouses a number of important rights and benefits. With short deadlines in probate, it is important to effectively secure the rights of a surviving spouse within the timelines provided by statute to ensure the surviving spouse is protected and receives all he or she is entitled to under Florida law. The failure to meet one of the probate deadlines can cause a surviving spouse to lose one or more spousal entitlements.

Survey Reveals Helpful Insights for the Future of Estate Planning

In recent findings by WealthCounsel, the Estate Planning Awareness Survey helped to reveal estate planning insights that will impact the legal industry on both the firm and client levels. Nearly half of those surveyed (47%) believe that estate planning is largely for the wealthy, and 49% report feeling that their assets are not worth enough to consider an estate plan. Subsequently, the survey report addressed some of the major reasons why Americans are not planning, including feeling that their assets are not worthwhile (37%) and that they are not wealthy enough (29%). Additionally, only 27% of participants have talked with family members about creating an estate plan. Perhaps, this misinformation stems from the fact that 53% reported that it was difficult to find an advisor they trust in helping out with their estate planning needs. This Survey insightfully brings attention to the need for improvement in America’s awareness and understanding of estate planning, allowing for future opportunities to extend services to all Americans in need of these services. 

See What Do Americans Think About Estate Planning?: Key Findings of WealthCounsel’s Inaugural Estate Planning Awareness Survey, WealthCounsel (2016).

Special thanks to Peter MacKellar (Vice President, Financial Services (Communication Strategy Group)) for bringing this article to my attention.  

 

Pete Weyrauch's Survivor Handbook

Pete Weyrauch, a retired brigadier general after 28 years of active duty, has developed the Survivor Handbook that is designed to:

• Provide information on Advance Directives and record preferences for final arrangements so that family members are not required to make difficult decisions at a difficult time.
• Provide consolidated information resources for timely notification of people and agencies affected by the death of a family member.
• Provide consolidated information resources to facilitate continuation of routine and periodic household functions, e.g., payment of bills and management of accounts.
• Provide a centralized place for historical information.

Over 2,500 hundred copies of the handbook have been provided to members of service clubs, business offices, church groups, and military organizations.

He does 90-minute presentations without charge and provides free electronic copies (email attachments) to those interested.

Contact Information:

512-869-2955 (H)

512-627-4340 (cell/text)

[email protected]

Download The Author - Flyer

ALI's Newest Forms in Estate Planning

The American Law Institute is now giving you access to online, editable forms drafted by the experts. Subscribe to a library of all the ALI CLE forms in this practice area for one low price.

There are several forms offered, including a Division of Charitable Remainder Trust After Divorce: A Model Memorandum; Modern Family Drafting and Planning (With Sample Provisions); Nuptial Agreement Forms and Lists for Estate Planners; and Planning for United States Clients with Foreign Property.

The total cost of the above forms if purchased individually: $57.00; but did you know that you can have them all for one low price?

Access all of the 326 forms in the ALI CLE Estate Planning Forms library, including those listed above, for one low annual price of $299.00.

A Tool for Portability

The Portability Calculator is a tool intended to help with making the decision of whether to elect portability. The Excel based program includes inputting information in a three-step process, which results in production of a memo based on input. Two packages are available, including the downloadable Standard Package priced at $495 and the CDRom Premium Package for $695.

See Donald Kelley, The Portability Calculator, Wealth Management, March 10, 2015.

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