Wills, Trusts & Estates Prof Blog

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

Monday, November 12, 2018

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)

Saturday, November 10, 2018

Article on Testamentary Freedom and Family Protection in Scotland

ScotlandKenneth Reid recently published an Article entitled, Testamentary Freedom and Family Protection in Scotland, Wills, Trusts, & Estate Law eJournal (2018). Provided below is an abstract of the Article.

In a sense, testators in Scotland are free to do as they please, for a will is not challengeable on the ground of having failed to provide for children, or a spouse, or some other relative. Yet, regardless of what a will says or does not say, a child or spouse of the deceased is entitled to a fixed share of the deceased’s estate. Since 1964 this has been confined to the deceased’s movable estate and there is no claim in respect of immovable property. Where a deceased is survived by both spouse and children, the movable estate is divided into three – one-third for the spouse, one-third to be shared among the children, and one-third to be disposed of in accordance with the will. Where only a spouse, or only children, survive, the division is into two equal parts and not three. These ‘legal rights’ of the children and surviving spouse are personal rights against the executor of the deceased and are satisfied by payment in money.

This paper considers the history of legal rights in Scotland, their scope and calculation, the rules on discharge, the requirement to collate lifetime advances, and the requirement to choose between legal rights and an express bequest in the will.

Legal rights are of medieval origin, and have survived various attempts to change them. In recent years, the position of children has been seen as especially controversial. On one view, children should have merely a maintenance claim from the deceased’s estate, in cases of proved need. On another view, a child’s position in the family should continue to be recognised by means of a fixed share in their late parent’s estate. In the absence of consensus on this issue, the Scottish Government has recently rejected a package of reforms proposed by the Scottish Law Commission. Uncertain as to what the future should hold, Scotland has chosen to stick with rules developed, unthinkingly, in the distant past.

November 10, 2018 in Articles, Current Affairs, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Friday, November 9, 2018

A To-Do List for Widows, and How to Protect the Identity of a Dead Loved One

Calla-liliesWidows and widowers are often facing debilitating grief while attempting to get their lives, futures, and finances in order. Having an effective plan and to-do list in place could make this difficult time more emotionally manageable. Also, having a deceased loved one's identity stolen can be a painful reminder of their absence, and a great violation to their memory, so taking steps to prevent it are important.

  • Inform Social Security of the loved one's death and notify all credit bureaus as well to freeze the person's credit.
    • Death Certificate and letters testamentary will be required.
  • Notify tax preparer, and financial institutions.
    • In the event that there is a non-qualified account then there should be a step-up in basis on at least 50% of the account and possibly 100% of the account, depending on the circumstances.
    • And IRA can be treated as a rollover account for a spouse
  • Review life insurance policies and see your options so you can decide what makes the most sense based on cash flow needs.
  • Meet with an estate planning attorney if there was a will or trust to understand the loved one's final wishes.
  • Have a tax projection prepared.
  • Sign proper forms for all brokerage accounts and new account forms in order to reflect the new ownership and title.

See Karin Price Mueller, A To-Do List for Widows, and How to Protect the Identity of a Dead Loved One, NJ.com, November 6, 2018.

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

November 9, 2018 in Current Affairs, Elder Law, Estate Administration, Estate Planning - Generally, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Wednesday, November 7, 2018

Estate-Planning Strategies for Art and Collectibles Explained

VangoghOn November 1 at Bonhams in New York City, three experts in the field of trusts and estate planning discussed the various options available to clients regarding planning for art disposition, the need for appraisals and the importance of communicating one’s wishes with the next generation.

“Intentional planning is the most important issue to address with your clients,” Sherri Cohen, vice president and director of valuations, Trusts & Estates at Bonhams stated. Many clients also seem to overlook the big picture of disposing or transferring a collection. Many pieces may have monetary value but others may have emotional value, possibly due to knowing the artist that produced a piece or simply because the client has had that piece for decades.

Warren K. Racusin, a partner and chair of the trusts and estates group at Lowenstein Sandler LLP in New York City, noted that, “collectors are good with acquisitions but often make mistakes regarding the four methods of disposing their art.” Those method are selling, gifting, bequeathing, and donating to a charitable organization or charitable remainder trust. Appraisals are necessary to establish basis, no matter how the pieces are disposed of from the estate.

Communication within a family when it comes to art collections is vital, and lack of it is a prime cause of litigation. Parents must be transparent about their reasons for disposing of their art and ascertain their children’s preferences. If parents want to dispose of their art, the first question to the children should be: “Do you want this stuff?”

See Dawn S. Markowitz, Estate-Planning Strategies for Art and Collectibles Explained, Wealth Management, November 5, 2018.

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

November 7, 2018 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, November 6, 2018

Article on Sign on the [Electronic] Dotted Line: The Rise of the Electronic Will

SignatureGerry W. Beyer & Katherine Peters recently published an Article entitled, Sign on the [Electronic] Dotted Line: The Rise of the Electronic Will, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

The electronic will is here … almost. The last two years have seen rapid development in the area of electronic wills. As of September 2018, several states either have enacted electronic will statutes or are in the process of considering such legislation. This article provides the history of e-wills and reviews e-will statutes, both enacted and proposed, along with the Summer 2018 draft of the Electronic Wills Act.

November 6, 2018 in Articles, Elder Law, Estate Planning - Generally, New Legislation, Technology, Wills | Permalink | Comments (0)

Insolvent Estates of Wealthy Decedents

Probate2The Internal Revenue Service has been emboldened by the strength of federal law and a recent case in which federal taxes were deemed a higher priority than fiduciary fees, thus creating issues for unwitting executors for insolvent (yet materially wealthy) estates. These type of estates usually involve an impressive menagerie of assets anchored with debts, such as homes with large mortgages, promissory notes in favor of closely held businesses, and high credit card balances.

The messy web of debts may also be coupled with tangled relationships with ex-spouses, children, and disputes with present or former business associates. There could be obligations from a divorce decree or settlement that must be performed before other responsibilities, so an advisor should work with the executor to lay out a plan. It should succinctly explain all assets and liabilities and a strategy for locating other assets and liabilities, and understand state statutory requirements to prioritize certain claims if the estate cannot sufficiently pay all claims. Many states are modeled after the Uniform Probate Code, but may have subtle differences.

The executor is free to negotiate with creditors in the best interest of the estate, and many creditors are willing to do so. They may believe that some money is better than no money at all.

Lastly, devise a method to protect the executor. On the opening of the estate, the executor should consider filing in the probate court a request for authority to pay fiduciary compensation and other expenses of administration, even if those expenses are still unknown at the time.

See Mark D. Brandenburg, Insolvent Estates of Wealthy Decedents, Wealth Management, October 31, 2018.

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

November 6, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Trusts, Wills | Permalink | Comments (0)

Monday, November 5, 2018

CLE on Estate Planning and Administration: The Complete Guide

CLEThe National Business Institute is holding a conference entitled, Estate Planning and Administration: The Complete Guide, on Wednesday, January 23, 2019 - Thursday, January 24, 2019 in San Diego, California. Provided below is a description of the event.

Program Description

Find Out How Key Estate Planning Tools are Drafted and Implemented

Every client's estate is unique in its assets composition, family dynamics and future needs, but all are ruled by the same principles and are subject to the same tax and legal limitations. In this comprehensive legal guide, experienced attorney faculty will guide you through the process of estate planning and administration and show you how to select the best trust instruments and wield them skillfully to avoid mistakes at probate. They will also teach you how to properly administer the estate and tackle potential mistakes of improperly drafted documents, changed circumstances and newly arising conflicts. Become fully prepared to protect your client's legacies - register today!

  • Get an update on the current tax regime and other key regulations.
  • Get the case off on the right foot with a thorough and thoughtful client intake.
  • Compare key trust structures and their effect on the grantor and beneficiary tax future burdens.
  • Help clients plan for and fund long-term care.
  • Ensure confidentiality before and after the client's death.
  • Get useful checklists for key dates and tasks in estate administration.
  • Clarify what can be distributed through non-probate transfers and how to do it correctly.
  • Explore creditor issues in estate administration and get trouble-shooting tips from the pros.
  • Find out how much planning can still be done after the client's passing.
  • Discuss the duties and powers of fiduciaries, their limits and real-life application.
  • Get tips for closing the estate to prevent future disputes.

Who Should Attend

This basic-to-intermediate level seminar on estate planning and administration is designed for:

  • Attorneys
  • Accountants and CPAs
  • Paralegals
  • Tax Managers
  • Trust Officers
  • Certified Financial Planners
  • Investment Advisers

Course Content

DAY 1: ESTATE PLANNING AND TRUST BASICS

  1. Key Laws and Client Intake/Goal Setting
  2. Planning for Long-Term Care and End-of-Life Decisions
  3. Testamentary Documents - Drafting Do's and Don'ts
  4. Common Trust Structures and When They're Used
  5. Transfers During Life and Inter-Vivos Trusts
  6. Tax Consequences of Trusts

DAY 2: PROBATE AND ESTATE ADMINISTRATION

  1. Probate Process Overview
  2. Marshalling Assets and Dealing with Creditors
  3. Post-Mortem Tax Planning Options
  4. Legal Ethics in Estate Practice
  5. Trust Administration and Termination Basics
  6. Closing the Estate

November 5, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Article on The Socioeconomics of Twenty-First Century Wills Formalities

Will and testamentBridget J. Crawford recently published an Article entitled, The Socioeconomics of Twenty-First Century Wills Formalities, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

Individuals have executed wills the same way for centuries. But over time, traditional traditional requirements have relaxed. This Article makes two principal claims, both of which disrupt fundamental assumptions about the purposes and functions of wills formalities. First, the traditional requirements that a will must be in writing and signed by the testator in the presence of (or acknowledged before) witnesses have never adequately served the stated their stated purposes. For that reason, strict compliance with formalities cannot be justified by their cautionary, protective, evidentiary and channeling functions. Reducing or eliminating most of the long-standing requirements for execution of a will is consistent with the true purpose of wills formalities – authenticating a document as the one executed by the testator with the intention of having it serve as the binding directive for the post-mortem distribution of the testator’s property.

This Article’s account has important implications for the way that legal scholars, lawmakers and lawyers think about wills. The Article’s second claim is that the substantive standard of the harmless error rule – that the decedent intended a particular document to be the decedent’s last will and testament – should be the only threshold that must be satisfied for a court to admit the document to probate. Widespread adoption of such an intent-based rule is preferable to one that is overly formalistic. Current formalism leads both to false positives (i.e., grant of probate to a document not intended by the decedent as the decedent’s will) and false negatives (i.e., denial of probate of document clearly intended by the decedent as the decedent’s will). An intent-based rule would make more likely the valid execution of wills by poor and middle-income people who typically cannot or do not consult attorneys. An intent-based standard also sets the stage for widespread recognition of electronic wills, if states are able to address concerns about authentication, fraud and safekeeping of electronic documents. Technological developments could make estate planning in the twenty-first century more accessible than ever before to people of all wealth and income levels if the legal profession is prepared to embrace new ways of executing wills.

November 5, 2018 in Articles, Current Affairs, Estate Planning - Generally, Wills | Permalink | Comments (0)

Friday, November 2, 2018

CLE on Estate Planning in Depth 2018

CLEAmerican Law Institute is presenting a webcast on demand entitled, Estate Planning in Depth 2018. The program contains nine separate segments, or can be purchased as a full course. There are also MP3 downloads.

November 2, 2018 in Conferences & CLE, Elder Law, Estate Administration, Estate Planning - Generally, Income Tax, Trusts, Wills | Permalink | Comments (0)

Thursday, November 1, 2018

Article on Statutory Limitations to Testamentary Freedom in Nigeria: A Comparative Analysis

NigeriaDesmond Oriakhogba & Alero Fenemigho published an Article entitled, Statutory Limitations to Testamentary Freedom in Nigeria: A Comparative Analysis, Wills, Trusts, & Estates Law eJournal (2013). Provided below is an abstract of the Article.

In Nigeria, a person when alive often has the freedom to dispose of his property to whomever he chooses. However, when he dies, limits have been put upon that freedom by legislation in some states of the country, when he has made a will concerning the disposition of his estate. These restrictions to testamentary freedom are often justified on cultural, religious, moral and social grounds. This paper appraises these limits to testamentary freedom in Nigeria, while comparing it with the positions in England, Ghana and South Africa. The question as to whether or not the limitations to testamentary freedom are justified is also considered in the paper. The paper finds that some limitations whilst worthy ideals and thus justified, could bring about unrealistic and impracticable results while some totally take away freedom from the testator. The paper recommends that a balance between the wishes of the testator and following the strict letter of the statutes as to the limitations be found so as to as much as possible, give effect to the desires of the deceased testator as stated in his will.

November 1, 2018 in Articles, Intestate Succession, Wills | Permalink | Comments (0)