Wills, Trusts & Estates Prof Blog

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

Tuesday, October 20, 2020

Article on Will Formalities in Louisiana: Yesterday, Today, and Tomorrow

Ronald J. Scalise recently published an article entitled, Will Formalities in Louisiana: Yesterday, Today, and Tomorrow, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Wills

Louisiana’s form requirements for wills are a curious amalgam of civil and common law rules. Although the current law, which provides that a will may be executed in either olographic or notarial form, was premised upon good intentions and designed with the goal of simplicity in mind, the current state of affairs has regrettably resulted in law that is artificially and unnecessarily complex and rigid. It is a unique Louisiana product that has crystalized in the law and, in practice, results in many unnecessary intestacies today. It is time for reform. This Article dissects each of the individual requirements necessary for the making of a will in Louisiana with a goal not only of descriptive assessment but also of ascertaining whether each requirement is still necessary. This Article suggests that many — perhaps most — of the current form requirements for wills should be reconsidered, and it is hoped that this Article will provide a basis for discussion of future revision.

October 20, 2020 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, October 18, 2020

Article on Distribution of Inheritance under Islamic Law: An Appraisal of Online Inheritance Calculators

Shahbaz Ahmad Cheema recently published an article entitled, Distribution of Inheritance under Islamic Law: An Appraisal of Online Inheritance Calculators, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. 

With the proliferation of the internet, new modes of access and dissemination have been invented. This paradigmatic shift is not only providing a stimulus for science and technology, but traditional fields of knowledge, such as religious studies and allied disciplines, are also among its beneficiaries. Once it was an uphill task to find a scholar well versed in Islamic inheritance law and ask for advice on the distribution of a deceased’s estate. Various online inheritance calculators have made it convenient, and to some extent, eliminated the inevitability of the consultation with scholars of inheritance. In this background, the paper analyzes some accessible online inheritance calculators and explores their strengths and weaknesses. For evaluative purposes, two benchmarks are devised: one is ‘accuracy score’ and another ‘efficiency grade’. The outcome of the assessment is mixed. Despite the accessibility of online calculators, one should not repose outright confidence without being aware of their merits and demerits. Some calculators have evolved a smooth and efficient system to solve a large number of propositions of inheritance, while others lack proficiency and accuracy.

October 18, 2020 in Articles, Estate Administration, Estate Planning - Generally, Religion, Trusts, Wills | Permalink | Comments (0)

Thursday, October 15, 2020

Complexity Of Inheritance Tax Rules Leaves Families Exposed

RegulationUnfortunately, inheritance tax laws and their governing rules are complex and difficult for the general public to understand. This leads to investigations into estates; investigations that the owners of those estates eventually must pay for.

The most common gift to "go wrong" are gifted properties due to the lack of understanding and skillset in the area of administration of estates. With the fluctuations of house prices and stock markets, people often get caught up in the figures and the result is a failed gift. 

One solution to this problem is to ensure that the person advising you and your estate is a professional. The knowledge of a qualified person will endure that the estate is handled correctly. 

It is also important to have a professional executor, instead of a family member, which people often use to save money. One advantage to using a professional is that they can act impartially when dealing with potential disputes between family members following the grantors death. These advantages also provide the logical reasoning behind using a professional trustee. 

In sum, by using professionals to handle your estate and carry out your wishes, your estate plan is far less likely to fail and will make you more comfortable in the end. 

See Charlotte Ponder, Complexity Of Inheritance Tax Rules Leaves Families Exposed, Today's Wills & Probate (UK), October 1, 2020. 

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

October 15, 2020 in Death Event Planning, Estate Administration, Estate Planning - Generally, Gift Tax, Trusts, Wills | Permalink | Comments (0)

Why Estate Planning Is Worth Every Cent

Estate 12.02.32 PMEstate planning does not always have to be expensive. There are free online services available to draft documents used for estate planning like wills, trusts, durable powers of attorney, and healthcare proxies. Although these options may be the cheaper route, it is worth your money to use an estate planning advisor.

Although the aforementioned online services may help you draft documents, without an effective estate plan, those documents are useless. Which is why it is important for you to use an estate planning advisor to help you create a plan for those documents to fit into. 

There are three elements of combined by estate plans:

  1. learning from the past
  2. adapting to the present, and
  3. anticipating the future

Estate planning documents may adhere to the first two, but only with the help of a professional advisor can you effectively anticipate the future.

Many do not want to use an estate planning advisor due to their cost, however, without one your estate plan will likely be ineffective and possibly even useless. With the help of a professional, you can ensure that your estate plan covers all of the areas you need and will be implemented correctly. 

See Matthew Erskine, Why Estate Planning Is Worth Every Cent, Forbes, September 30, 2020.

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

October 15, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, October 6, 2020

Top Ten Estate Planning Recommendations before the End of 2020

EstateThe end of 2020 is quickly approaching and due to the adverse impact of the coronavirus and the election coming up in about a month, it may be time to look over and update your estate plan.

Below are the top ten estate planning recommendations to consider before the end of 2020:

  1. Exemptions may go back down
    1. If President Trump is not reelected, the $11.58M per person tax exemption will likely go down before the expected year of 2026. And even if President Trump is reelected, the exemption is expected to top back down at the end of 2025. 
    2. It may be smart to take advantage of the tax exemption before the end of 2020 as you will be safe from a "claw back"
  2. Discounts, GRATs, Grantor Trusts, etc. may go away
    1. Similar to the tax exemptions, if Joe Biden is elected, there will likely be a vast change to this area of estate planning. 
  3. Married Couples can Have their Cake and Eat it too
    1. By taking advantage of certain trusts, you can take advantage of the gift tax exemption while not losing access to your assets. 
  4. A Single Individual can also Have his or her Cake and Eat it too
    1. In certain jurisdictions, you still may be able to use certain trusts to "gift" into in order to take advantage of the exemption.
  5. Interest Rates are at an all-time low
  6. Values of some Asset Classes are Depressed
    1. Particularly real estate
  7. Migration to Florida and other low or no Income Tax States 
  8. Capital Gains Rates could Double
  9. Hold off on Charitable Gifts
  10. Be Smart and Sensible 

See Albert W. Gortz, David Pratt, Mitchell M. Gaswirth, Andrew M. Katzenstein, & NAthaniel W. Birdsall, Top Ten Estate Planning Recommendations before the End of 2020, National Law Review, October 6, 2020.

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

October 6, 2020 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Friday, October 2, 2020

The art of leaving a legible financial footprint

Estate-Planning-1560x1040Estate and tax attorney Tom O'Rourke discussed common misconceptions in regard to estate planning on Mike Causey's show a few days ago. Those common misconceptions are listed below:

 

  1. I am not rich so I don't need an estate plan
  2. Everybody knows what I want, so why do I need a will?
  3. Minimizing taxes is one of the most important goals in developing an estate plan. 
  4. I should leave everything to my children in equal shares. 
  5. My spouse and I have been separated for many years, but haven't bothered to get a divorce. I am not going to leave him/her anything. 
  6. My significant other and I have been living together for many years and I want him/her to inherit everything I have. 
  7. I have a simple will that takes care of all my concerns and that is all I need. 
  8. I have got a trust and that takes care of everything. 

Tom O' Rourke also provided an estate planning checklist that will help deal with these concerns, especially in the "Time of the Pandemic." 

  1. Review your will or trust to make sure it remains consistent with your wishes.
  2. Check your medical directive and financial powers of attorney to insure that they remain consistent with your wishes.
  3. Review your beneficiary designations.
  4. What about your pets?
  5. Do you have specific wishes for a funeral and burial?”

See Mike Causey, The art of leaving a legible financial footprint, Federal News Network, September 29, 2020.

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

October 2, 2020 in Current Events, Elder Law, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Wednesday, September 30, 2020

Electronic-Will Legislation: The Uniform Act versus Australian and Canadian Alternatives

E-willThe Uniform Electronic Wills Act (Uniform Act), promulgated in 2019, allows created wills to be formalized on computers and other portable devices, leaving the wills to be completely electronic and never on paper. Also, testators are allowed to execute a will by signing it electronically and witnesses can be either physical or virtual. 

This new era of signing and executing wills makes storage and filing much simpler since the wills can be stored as a file. As of now, no state has adopted the Uniform Act, but Arizona, Florida, Indiana, and Nevada have enacted non-uniform legislation authorizing electronic wills. 

Although this new technology may certainly make things a bit easier, there are a few downfalls. For one, under the Uniform Act, all a testator and witness must do is sign type their names, making it akin to online transactions. This could raise contractual issues in the future, since e-signatures are and mutual agreement have often been food for the belly of litigation. Also, this will make it much harder for witnesses and testators to recognize the documents in the future. Fraud and forgery will pose a much greater risk in this form of formalizing wills. 

People may also be more encouraged to perform DIY wills instead of reaching out for help. 

Essentially, the main worry is that the many safeguards that are in place due to the requirement to execute wills in person will be removed in in the electronic era of wills.

Despite the potential downfalls, there are also many upsides to executing wills electronically, especially for those affected by COVID-19. They are easier and allow those that cannot leave home a means to execute important estate planning documents. 

It will be interesting to see if and when states will adopt the Uniform Act. 

See Adam J. Hirsch and Julia C. Kelety, Electronic-Will Legislation: The Uniform Act versus Australian and Canadian Alternatives, American Bar Association: Probate and Property, September/October 2020. 

 

September 30, 2020 in Current Events, Estate Planning - Generally, Technology, Wills | Permalink | Comments (0)

Tuesday, September 29, 2020

Celebrity Estate Planning: Misfires of the Rich and Famous III

CelebrityWe tend to look at celebrities like they are supernatural, even immortal, which is probably why we are often shocked and confused when one of our favorite celebrities pass on. The truth is, like us, celebrities are normal people and like us, they often neglect estate planning. This is the truth despite the amount of attorneys and other representatives they have on their team. 

Discussed below are a couple of celebrity stories that will hopefully teach you a useful lesson on the importance of estate planning and the risks of avoiding the issue. 

Johnny Hallyday

You may know Hallyday as the "French Elvis." Hallyday died of lung cancer in December of 2017 at the age of 74. At the time of his death, Hallyday was married to his fourth wife when he passed and had adopted children as well as natural born children. 

Hallyday died with estate planning documents that had been executed in California that left his estate to Laeticia, his fourth wife and their two children upon her death. Hallyday's natural born children opposed this estate plan in French court arguing that French law should apply to Hallyday's estate. In 2019, a French court agreed with Hallyday's natural born children, finding that forced heirship applied. 

The lesson from this story is to make sure that your client knows exactly what they want and the emotional and financial battles that can result from certain estate planning decisions. 

In a like Hallyday's where the client may be able to choose their domicile, you will want to make sure you are clear as to which law will govern the estate. 

Stan Lee

Stan Lee is one of the creative minds behind Marvel. Lee died at the age of 95 in November of 2018. Despite his fame and contribution to the world, Lee was also subject to "predators who seek to take advantage of the elderly." Lee's estate was estimated at $80 million when he died. He was only survived by a daughter. 

After Lee's wife passed on, Lee was left without stable care and security. This lead to a battle between Lee's daughter and other people that had snaked their way into Lee's life. Lee realized that he had multiple people trying to manipulate him and steal his money and was forced to send out a "cry for help" in an affidavit. Luckily, one of these aforementioned snakes was arrested following an investigation by the Los Angeles Police. 

Lee had to spend his last months on this Earth protecting himself from elder abuse. If someone would do that to Stan Lee, you can bet your bottom dollar that they would do it to you too.

 

There are many, many more celebrity stories that shed light on the importance of estate planning and the risks associated with failing to do so. For more, 

See Jessica Galligan Goldsmith et al., Celebrity Estate Planning: Misfires of the Rich and Famous III, American Bar Association: Probate and Property, September/October 2020. 

September 29, 2020 in Current Events, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Administration, Trusts, Wills | Permalink | Comments (0)

Making Lemonade out of Lemons: Estate Planning Opportunities in a Low Interest Rate Environment

LemonadeWe have been thrust into an environment that is unpredictable and what many are referring to as "uncertain times." Due to the stress that has come with these "uncertain times" many people are not thinking about and are quite possibly even avoiding gifting programs. However, the current depressed financial markets and historically low interest rates have presented "a unique opportunity for families to pass a significant amount of wealth to younger generations with minimal transfer tax exposure."

There are multiple estate planning techniques that provide a great potential for upside "when implemented during a state of declining financial markets combined with the historically low interest rates. A few of these techniques are:

  • Grantor Retained Annuity Trusts
  • Sales to a Grantor Trust
  • Intrafamily Loans
  • Charitable Lead Trusts
  • Generation-Skipping Transfer Tax Planning

Before you begin planning your gifting strategy, it is important to remember that each individual has a combined federal estate and gift tax exemption of $11.58 million. Which means, each married couple has $23.16 million. This exemption will remain in place in 2025, barring any unforeseen reduction due to the 2020 elections or other factors. 

Now is a perfect time to take advantage of the "rare opportunity to make some lemonade out of lemons."

See Anna Katherine Moody & Emily A. Plocki, Making Lemonade out of Lemons: Estate Planning Opportunities in a Low Interest Rate Environment, American Bar Association: Probate & Property, September/October 2020. 

 

September 29, 2020 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Monday, September 28, 2020

Are you prepared to die? I am, and that’s the right way to live.

EstateplanningOf the near 202,000 Americans who have died unexpectedly from COVID-19 in the past 7 months, most of them were likely not planning for a sudden death. According to caring.com, "fewer than half of those 55 and older had completed estate-planning documents. The number 1 reason being they "haven't gotten around to it." 

However, the concerns surrounding COVID-19 has lead to a "boom" in estate planning. Estate planning checklists have begun to appear online to provide guidance on planning for life before and after death.

If there is one thing to take away from the risks of the Coronavirus, it is the importance of estate planning. Procrastination poses a risk that will go unnoticed for years if not checked. Keeping your will and living will updated is necessary in order to be prepared to die. 

Being prepared to die and being ready to go are not the same thing, of course. However, you can never be ready to go if you are not prepared to die; through end-of-life planning, you can get there. 

See Steven Petrow, Are you prepared to die? I am, and that’s the right way to live., Washington Post, September 26, 2020. 

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

September 28, 2020 in Current Affairs, Current Events, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)