Wills, Trusts & Estates Prof Blog

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

Monday, August 10, 2020

Estate Planning When You Own Cryptocurrency

CryptoIn 2010 Bitcoin had a value of less than one cent; in 2017, a value of $20,000; and at the end of July, 2020, a value of $11,000. 

Cryptocurrency has become a vital financial tool for individuals and businesses, since U.S. Congress has held hearings discussing the digitization of the dollar. Cryptocurrency planning has been neglected and cryptocurrency has been lost. "This has generated tales of people, who discarded their computer hard drives containing thousands of bitcoins now worth millions, sifting through mountains of garbage."

Cryptocurrency can be difficult to understand, so there are steps you should take to integrate cryptocurrency in your estate plan to ensure that your heirs and beneficiaries will avoid the associated risks. 

First, you should preserve the benefits of cryptocurrency. One of the best properties of Cryptocurrency is that it is highly secure. However, if you carelessly record the private key or seed phrase, that security is at risk. You should ensure that your planning procedures include how to secure this information. 

Next, avoid the risks of cryptocurrency. Since crypto can fluctuate even during the course of the day, so in a sense, it should be treated like stock. Also, crypto exists outside of government regulation, so no one is responsible for losses due to scams or theft. 

It is also important to note that without specific language, your trust will not be able to hold cryptocurrency. You must be extra careful if you are drafting your trust to include cryptocurrency, so that your heirs will be able to access it in the event of your death. 

You should ensure that if you or your business own any type of crypto that your estate, business succession and financial plans reflect that. 

See Matthew Erskine, Estate Planning When You Own Cryptocurrency, Forbes, July 30, 2020.

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

August 10, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Saturday, August 8, 2020

8 Tips for Having 'The Talk' with Elderly Parents

ElderAlthough estate planning can be emotional and often times uncomfortable, it is essential for every family. It is never safe to assume that everything will automatically be taken care of in the event of you or your parents' death.

In order to ensure that your family will be taken care of, you will need to have emotional, but necessary conversations. 

Below are eight tips to guide you in 'The Talk' with your elderly parents:

1. Plan what you can

  • It is important to discuss an estate plan and all of the details to ensure your parents estate will be taken care of in the event of their passing. 

2. Identify Key People 

  • Doctors
  • Attorney
  • Financial planner and/or accountant
  • Insurance brokers
  • Minister of religion
  • Closest friends

3. Address the Topic of a Will 

  • It is important determine whether your parents already have a will in place and if the document is up to date. If not, it is important that a will is created. 

4. Talk About Power of Attorney

  • Find out if someone has been appointed and if not, who the best choice is for this appointment. 

5. Discuss End-of-Life Wishes

  • This portion may be emotional, but it is important that their wishes are discussed as the estate plan will be incomplete without them. 

6. Ask About Insurance Policies

  • Health insurance – Medicare or private
  • Life insurance
  • Home insurance
  • Long-term care insurance
  • Disability insurance

7. Request Access to Tax Returns

  • Although these documents may not be necessary after death, it is important to know where they are located just in case. 

8. Discuss All Other Practicalities 

  • This includes:
    • Make a list of their accounts – financial accounts such as bank and mutual fund, credit accounts, and store accounts
    • Check if they are registered organ donors or whether they would consider donating their organs
    • Talk about the memorial service they want and whether they want to be buried, cremated, or some other option.

These conversations will likely be tough and emotional no matter what strategy or plan you use, but patience and transparency are keys to ensure an effective estate plan. With the right people and the right setting 'The Talk' can be done effectively. 

See Ellen Klein, 8 Tips for Having 'The Talk' with Elderly Parents, Elder Law Answers, July 28, 2020.

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

August 8, 2020 in Elder Law, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Thursday, August 6, 2020

Losing loved ones during the pandemic: The legal rights of Muslim heirs

PandemicSince the Coronavirus health crisis hit our country, deaths continue accumulate daily. The global pandemic is causing us to lose friends and family. Due to a significant increase in death rates resulting from COVID-19, more people are in need of help due to inheritance related problems. 

It is common for the deceased to leave behind their estate and/or assets they possessed during their lifetime. The estate "comprises of all property that the deceased had owned, whether movable and/or immovable."

When Muslims die, there are four duties that need to be performed with such assets they possessed. 

They are:

  1. Paying funeral and burial expenses
  2. Paying the debts of the deceased (if any)
  3. Determining the will of the deceased, if any (which can only be up to one third of the estate)
  4. Distributing the remainder of the estate and property amongst the relatives or heirs of the deceased

Shariah law governs the legal distribution of property in Bangladesh. 

According to Sayeda Silma Tamanina, it is necessary to determine the relatives of the deceased who are entitled to inherit the estate or property along with the proportion of the shares to be inherited by them individually and collectively."

The amount of heirs can be very broad and sometimes distance family members are entitled to succeed in the absence of primary heirs. Also, a son inherits double the share of a daughter in these circumstances. 

Inheritance is considered an "integral part" of Shariah Law giving heirs and descendants a right to claim the estate and property of their deceased family members. 

However, the heirs must take the proper legal steps to ensure the legal transfer of the properties. These steps include:

  1. Make an inventory of all assets
  2. Collect the Warisham Certificate or Legal Heir Certificate 
  3. Collect the Succession Certificate
  4. Mutation of Lands 

After completion of these steps, the inheritors can successfully transfer the properties in their individual names.

See Sayeda Silma Tamanina, Losing loved ones during the pandemic: The legal rights of Muslim heirs, The Daily Star, July 29, 2020. 

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

August 6, 2020 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Religion, Trusts, Wills | Permalink | Comments (0)

Beyond Estate Planning: Risk Management Through Continuity Planning

RM"Continuity Planning is the long-term risk management process for families, family owned businesses and family offices." 

Implementing a continuity plan reduces the impact of foreseeable risks and takes advantage of future opportunities. 

Risk management is essential, especially now as we are still dealing with the COVID-19 Pandemic. Unfortunately, risk management is one thing that was lacking when the pandemic hit our country, which lead to catastrophic consequences. Business owners and management are likely re-assessing their risk management and continuity plans.

Some estate planning objectives that are used for risk management include:

1.      Transferring financial risk to a third party (i.e., life insurance),

2.      Avoiding the risk (i.e., asset protection),

3.     Reducing the negative effect or probability of the risk (i.e., discounting techniques, gifts in trusts), and

4.     “Freezing” some or all of the potential or actual tax consequences of a particular transfer by breaking up ownership and control

Other objectives in Continuity Planning and risk management include:

  1. Developing scenarios for medium- and long-term planning
  2. Measuring the processes, leadership and resources needed to sustain the Continuity of ownership and control, and
  3. Modeling the dynamics within the family enterprise systems over time.

See Matthew Erskine, Beyond Estate Planning: Risk Management Through Continuity Planning, Forbes, July 28, 2020. 

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

August 6, 2020 in Current Events, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Wednesday, August 5, 2020

Article on Compulsory Portion and Forced Heirship in Historical and Comparative Perspective

Reinhard Zimmermann recently published an article entitled, Compulsory Portion and Forced Heirship in Historical and Comparative Perspective, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Compulsory

The essay traces the development of mandatory family protection from Roman law through the ius commune to the modern civilian codifications. The Justinianic reform of 542 AD had failed to streamline and simplify the pertinent rules of classical Roman law. It was left, therefore, to the draftsmen of the codifications from the end of the 18th century onwards to tackle that task. Two models were particularly influential; one of them can be found in the Austrian Civil Code of 1811, the other in the French Code civil of 1804. Germany adopted the Austrian model of a „compulsory portion“ (i.e. a personal claim for the value of a part of the estate). Outside of Germany, the French model of „forced heirship“ (part of the testator’s property is reserved to his closest relatives) was extremely influential at first. The essay then looks at reforms in a number of countries of the Germanic and Romanistic legal systems, with some of the Romanistic countries having undergone a change of system. Mandatory family protection by means of a compulsory portion thus appears to gain ascendancy. Apart from that the range of persons entitled to such compulsory portion tends to be drawn more narrowly today than in earlier times. Also, the quotas granted to persons entitled to mandatory family protection have, in many places, been lowered. Characteristic for a number of legal systems and reform drafts is also an endeavour to render the law concerning mandatory family protection more flexible. The power to deprive a person of his right to a compulsory portion, or to become forced heir, has been extended in some legal systems. Finally, in view of the long-standing tradition in the continental legal systems of fixed quotas it is interesting to see that, time and again, the concept of a needs-based claim for maintenance has been considered, or even implemented, particularly for the surviving spouse

August 5, 2020 in Articles, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, August 4, 2020

Article on Examining the Legal Implications of Making a Will Vis a Vis the Appointment of a Next of Kin

Timilehin Edun recently published an article entitled, Examining the Legal Implications of Making a Will Vis a Vis the Appointment of a Next of Kin, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Last-will-and-testament-michigan

The general notion attached to the making of a Will is death. The purport of this misconception is premised on the view that a Will is made in anticipation of a person’s demise albeit false. More often, people fail to realize that a Will is a testamentary document stating/itemizing the intention of the maker in the event of his demise. Therefore, nothing indicates that the maker of a Will is going to die immediately after preparing the document rather, what a Will does is to help is clearly. This short article examines the legal implication of making a valid Will, how beneficiary is not the same as Next of kin in the eye of the Law and lastly how the making of a Will is not a death pronouncement.

August 4, 2020 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Monday, August 3, 2020

Most Estate Plans Fail, Don’t Let Yours Be One Of Them

EstateEstate planners will tell you that many estate plans do not achieve the owners' goals; They will also tell you that these failures were often avoidable. 

There are two main reasons for estate planning failures:

  1. The lack of a follow through and 
  2. Heirs not being prepared for the financial transition 

You should regularly update your plan. One way that clients fail to follow through us by funding a living trust. These trusts are set up to "avoid probate and ensure assets are managed in cases of disability."

Powers of attorney and advance medical directives are other areas were estate planners often see mistakes. Many clients do not tell other people about these documents; and they do no good if no one knows about them. Be sure that an agent knows about these documents. 

One of the number one things that people fail to do is update their plan consistently. When your situation changes and when the law changes, this should be an alert that you may need to update your plan. Failing to do so can produce major repercussions for you and your loved ones. 

The second reason for the failure of estate plans is not preparing heirs. You should inform your heirs to ensure that there is a smooth financial transition in the event of your death. If you have heirs that are not responsible or do not know how to handle money or property properly, you should take extra precautions.

You should not only inform your heirs, but also teach and educate them. 

If your avoid these two mistakes, your estate plan will be far less likely to fail. 

See, Bob Carlson, Most Estate Plans Fail, Don’t Let Yours Be One Of Them, Forbes, Jul 31, 2020.

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

August 3, 2020 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Sunday, August 2, 2020

Article on Empirical Inheritance Law

Alexander A. Boni-Saenz recently published an article entitled, Empirical Inheritance Law, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Inheritance

Empirical legal scholars tell it like it is. The nature of the “it” that we might want to know about varies significantly by legal field, however, and it also differs based on one’s scholarly position within that field. This Comment explores the major ways that empirical legal scholarship can be valuable to those of us working on normative or theoretical legal scholarship in inheritance law.

August 2, 2020 in Articles, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Friday, July 31, 2020

Article on Testamentary Transfers and the Intent versus Formalities Debate: The Case for a ‘Charitable’ Common Ground

Peter T. Wendel recently published an article entitled, Testamentary Transfers and the Intent versus Formalities Debate: The Case for a ‘Charitable’ Common Ground, Wills, Trusts, & Estates Law ejournal (2020). Provided below is the abstract to the Article. Test

The dominant issue in the law of wills for much of last half century has been how much formality the law should require before giving effect to a party’s testamentary intent. The traditionalists favor: (1) the maintaining the prevailing approach to the Wills Act formalities; (2) strict enforcement of those formalities; and (3) courts having the power to construe but not reform a will. The intent-oriented advocates favor: (1) reducing the Wills Act formalities to a minimum; (2) granting courts the power to dispense with those formalities under the harmless error doctrine; and (3) granting courts the power to reform a will, even if there is no ambiguity in the will. The problem is the underlying variables inherent in the debate are so indeterminate (what is the value of testamentary intent; how much increased costs of administration and potential for fraud is there in the harmless error and/or power-to-reform doctrines), it is tough to imagine much movement in the debate. Recent developments, however, shed a new light on the debate. The debate has overlooked a variable – charitable gifts – that offers a common ground where the two sides should agree. The public benefits associated with saving failed charitable testamentary gifts more than offset the increased administrative costs and potential for fraud associated with the harmless error and power-to-reform doctrines. That conclusion, however, also reframes the issue with respect to the remaining universe of failed testamentary gifts. Do the benefits derived from saving failed noncharitable testamentary gifts exceed the increased administrative costs and potential for fraud associated with the harmless error and power-to-reform doctrines?

July 31, 2020 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

12 Different Times When You Should Update Your Will


Will
While some people know they need to update their will but never get around to updating their wills before they pass on, many others believe that their documents are all squared away and do not need to be altered or updated. The latter group's families usually have to deal with the mess that is left behind due to omissions and other mistakes. 

If you are in either one of these groups, here are a list of 12 different times when you should update your will:

  • You are having your first child
  • You are thinking about divorce
  • You have gotten divorced
  • Your child gets married
  • Your beneficiary develops creditor or substance abuse problems
  • Your named executors or beneficiaries die
  • Your young family member becomes a responsible adult 
  • New legislation is passed
  • You come into a windfall of money 
  • You can't find your original will
  • You buy property in another country or move to another country
  • Your family and friends become enemies

If anything on this list applies to you, it is likely that your will ought to be looked at or changed. Failure to do so will likely leave behind a disaster for your loved ones to clean up after you pass on. 

See Daniel A. Timins, 12 Different Times When You Should Update Your Will, Timins Law (Kiplinger), May 26, 2020.

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

July 31, 2020 in Estate Planning - Generally, Wills | Permalink | Comments (1)