Wills, Trusts & Estates Prof Blog

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

Thursday, July 27, 2017

Article on Dealing with Shares on a Shareholder's Death: The Plight of the Deceased's Personal Representative

Akmal Hidayah Halim, Wan Noraini Mohd Salim, Halyani Hassan, Nor Azlina Mohd Noor, & Azhani Arshad recently published an Article entitled, Dealing with Shares on a Shareholder's Death: The Plight of the Deceased's Personal Representative, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Objective: This paper aims to examine the extent of the personal representative's duties and liabilities in dealing with shares on the death of a shareholder. The paper also analyses the procedure to administer the shares and the available options to the estate beneficiaries with regard to their entitlements to the shares.

Methodology/Technique: The discussion adopts the doctrinal analysis by examining the existing primary and secondary materials, including statutory provisions as provided by the Probate and Administration Act 1959 and the Companies Act 1965, case law and other legal and non-legal literatures relating to the duties and liabilities of the personal representative in dealing with the deceased's shares.

Findings: The discussion adopts the doctrinal analysis by examining the existing primary and secondary materials, including statutory provisions as provided by the Probate and Administration Act 1959 and the Companies Act 1965, case law and other legal and non-legal literatures relating to the duties and liabilities of the personal representative in dealing with the deceased's shares.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

July 27, 2017 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Top 5 Things to Remember If You’re the Executor

History-execution-executioners-executed-attorney-solicitor-rde5615_lowWhen a loved one passes away, there is no convenient checklist of duties provided to the bereaved detailing all the responsibilities that must be checked off the list. This is especially true for an executor of an estate. Fortunately, there is a relatively short list of tasks involved and a multitude of resources available for reference.

If named as an executor of an estate, the first step in fulfilling your duties is to retain the aid of a professional. Being an executor usually entails legal and financial liability. Having an attorney or planner on your side can significantly reduce the burden of the position. The next critical step for the executor is to make your position and the probate process official by producing the death certificate. It may be beneficial to have numerous copies of this document on hand, as the death certificate will be needed in multiple stages of the administration.

Third, cast a wide net. Part of an executors job is to find things: the will, insurance policies, bills, etc. Do not rush through this as overlooking what seems a small piece of information may be a cause of consternation in the future. Next, tell people you are the executor in order to keep communication lines open with all known and potential beneficiaries. In some states, this is actually a legal requirement. Finally, when dealing with taxes, enlist help. Not only are tax laws complicated, failing to file returns or intelligently handle tax liabilities may result in personal accountability to the estate.

 See Top 5 Things to Remember If You’re the Executor, Glenmede, March 17, 2017.

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

July 27, 2017 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Retirement, Deferred: Workers — and Companies — Grapple with a New Reality

Buy_the_great_escape_retirement_card_online_motorbike_cards_for_retirement_for_him_for_her_fun_retirement_cards_massive (1)Retirement in a modern context is a highly fluid ideal that is constantly in flux. For many, the notion of retiring at sixty-five is no longer a realistic option. With the average life span continuously increasing, it becomes more difficult for the average American to justify leaving work and living only on investment assets and returns for twenty to thirty years.

Companies are responding to this new reality through a number of various means. One, the phased retirement program, allows workers to continue working part-time or in alternate arrangements as they come closer to retirement. This allows workers to escape the workforce gradually while also permitting employers to retain skilled employees for longer periods. While these programs enjoyed a surge in popularity over a decade ago, their use has plateaued. There are a number benefits associated with this type of plan, but there are a number of drawbacks as well. For employees, requesting entrance into such a program is a clear signal to an employer that retirement is near. Such a signal may cause a premature end to consideration for raises or promotions. In formal phase-out programs, the retirement deadline may be a set date, which is difficult when flexibility is required due to life or financial changes.  

See Jena McGregor Retirement, Deferred: Workers — and Companies — Grapple with a New Reality, The Washington Post, July 19, 2017.

July 27, 2017 in Estate Planning - Generally | Permalink | Comments (0)

Wednesday, July 26, 2017

Philip Seymour Hoffman’s $12 Million Estate Planning Mistake

17105Philip Seymour Hoffman was an incredibly talented actor. He earned a plethora of awards for his roles in movies like Capote and The Master. Unfortunately for Hoffman’s heirs, his acting talent did not transfer to estate planning. Hoffman cultivated an aversion to leaving money to his children in a trust, as he was wary of creating “trust fund kids.” To avoid this issue, Hoffman left his $35 million estate to his girlfriend, Mimi. Because the pair was not married at the time of Hoffman’s death, the estate is subject to probate and approximately $12 million in estate taxes. If Philip had married Mimi, the estate would have completely avoided the estate tax. Hoffman’s estate is also subject to additional probate costs and possible legal challenges from creditors. These avoidable costs may potentially cost the estate millions more in expenses. Advanced estate planning could have provided Hoffman’s estate with extensive tax savings.

See John M. Goralka, Philip Seymour Hoffman’s $12 Million Estate Planning Mistake, Kiplinger, July 2017.

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

July 26, 2017 in Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0)

Article on The Elective Share Has No Friends: Creditors Trump Spouse in the Battle Over the Revocable Trust

161027_ff_cuttingoffkidsAngela M. Vallario recently published an Article entitled, The Elective Share Has No Friends: Creditors Trump Spouse in the Battle Over the Revocable Trust, Wills, Trusts, & Estate Law eJournal (2016). Provided below is an abstract of the Article:

A revocable trust is a popular estate planning tool used to disinherit a spouse in fifteen jurisdictions. In common law jurisdictions a surviving spouse, who is dissatisfied with his or her inheritance, has the right to receive an elective share of the decedent’s estate regardless of the decedent’s estate plan. However, fifteen jurisdictions have defined a dissatisfied spouse’s rights with a fractional share of the deceased spouse’s “net probate estate,” allowing one spouse to disinherit the other, by single-handedly transferring his or her assets to a revocable trust. To add insult to injury seven of these common law jurisdictions have recently codified trust law making it seamless for the decedent’s creditor to be paid from revocable trust assets.

The elective share is one of few limitations imposed on testamentary freedom. Common law property jurisdictions have created a public policy-based statute for married persons that prohibit the first-to-die spouse from disinheriting his or her surviving spouse. To avoid disinheritance, common law jurisdictions statutorily protect a surviving spouse (“spouse”) with an elective share. The elective share arose in the early twentieth century as a replacement of dower and curtesy rights. At that time the nature of wealth shifting from real to personal made dower and curtesy obsolete. The elective share protected the spouse from disinheritance by guaranteeing him or her with a fractional share of the deceased spouse’s net probate estate, a method known as the traditional elective share. However, like the shift from real to personal property there has been a subsequent shift in wealth from probate to non-probate assets (like revocable trusts) making the traditional elective share equally obsolete and inadequate to protect a spouse from disinheritance.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

July 26, 2017 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

The Ethics of Adjusting Your Assets to Qualify for Medicaid

Tumblr_m44fzypxpc1qbr0g2o1_1280Medicaid qualifications tend to vary from state to state. Generally, there exist some asset thresholds that may not be exceeded in order to qualify for aid. With Republicans in Congress seeking legislation aimed at reducing Medicaid benefits, ethical concerns regarding hiding wealth in order to achieve qualification have been forced back into the limelight.

There are two well-defined perspectives when it comes to hiding assets: those that refuse to do it, and those who are perfectly willing to hide their property in order to qualify for Medicaid. Janet Kinzer offered a poignant rebuke to those hiding assets: “People who engage in such planning are privileged enough to be aware of it and can afford the legal fees. Shouldn’t tax dollars only go toward the care of people who lack such access?”

While a fair point, there are a number of rebuttals, including the general unavailability of benefits for those suffering from dementia and other degenerative diseases; maladies that often require highly skilled care and constant supervision for extended periods of time. When faced with the very real possibility of exhausting every penny of saved wealth and leaving nothing to children in order to pay for long-term care, this ethical consideration becomes a bit less black-and-white for many. 

A quick warning, if you are ethically comfortable hiding assets to gain Medicaid benefits, be sure to hire a qualified attorney to help with the process. The intricacies of hiding assets is extremely convoluted, complex, and may have unintended consequences if undertaken without competent legal assistance.

See Ron Liber, The Ethics of Adjusting Your Assets to Qualify for Medicaid, The New York Times, July 21, 2017.

July 26, 2017 in Current Events, Elder Law, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Salvador Dali's Mustache Still Intact, Exhumation Reveals

1500636773765Last month, a Madrid judge granted permission for DNA testing on Salvador Dali’s corpse. The exhumation was recently undertaken to determine if Pilar Abel, claiming her mother had an affair with the artist, is his daughter. There were only five people allowed in the crypt: a judge, three coroners, and an assistant. The group oversaw the removal of hair, nails, and two long bones to be used for genetic testing. Interestingly, forensic experts noted that Dali’s mustache retained its trademark position and remained in the "classic shape of ten past ten.”

See Salvador Dali's Mustache Still Intact, Exhumation Reveals, Fox News, July 21, 2017.

July 26, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, July 25, 2017

Little Tax Plan Promises Big Benefits For Wealthy Clients

LafferOn April 26, the Trump Administration laid out a terse proposal for sweeping tax law changes. The current plan bears little resemblance to the ideals Trump espoused on the campaign trail, but it still offers many benefits for affluent taxpayers. The proposed tax cuts would eliminate the estate tax, the alternative minimum tax, and the 3.8% net investment income tax. The cuts would also reduce the highest marginal income tax rates for businesses and individuals. While these tax reductions would benefit many Americans, there is some concern among planners and advisors that there are additional implications that may negatively impact some clients.

See Eric L. Reiner, Little Tax Plan Promises Big Benefits For Wealthy Clients, Financial Advisor, May 22, 2017.

July 25, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Article on Identifying Connections between Elder Law and Gerontology: Implications for Teaching, Research, and Practice

BridgeNina A. Kohn,Maria Teresa Brown, & Israel Issi Doron recently published an Article entitled, Identifying Connections between Elder Law and Gerontology: Implications for Teaching, Research, and Practice, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Scholars have long called for elder law to become part of the larger study of gerontology. The authors conducted a qualitative, empirical study to determine the extent of connections between the fields of gerontology and elder law and to identify strategies for bridging gaps between the fields. As reported in this Article, we found that although both elder law academics and gerontologists indicate that both fields would benefit from research collaboration and cross-disciplinary teaching, the fields remain distinct with limited interaction. Based on these findings, we identify five key strategies for fostering meaningful connections between the fields. Finally, drawing on the expertise of the elder law academics and leading gerontologists interviewed as part of this study, we discuss how fostering such connections could work to the mutual benefit of the two fields and, potentially, improved policy-making in the area of aging.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

July 25, 2017 in Articles, Elder Law, Estate Planning - Generally, Teaching | Permalink | Comments (0)

DNA Samples Taken from Salvador Dali's Remains to Settle Paternity Suit

Salvador-daliPilar Abel, a sixty-one-year-old tarot card reader, claims her mother had an affair with Salvador Dali and that she is the product of their torrid relationship. Last month, a judge granted Abel’s request to exhume Dali’s corpse for DNA testing. Thursday, technicians moved a stone slab covering the artist’s final resting place in order to gain access to the crypt. A small committee of five oversaw the entire process, including the removal of biological samples to be used for genetic study. The samples have been sent to a forensic lab in Madrid; the analysis could take weeks. If Abel is found to be Dali’s heir, this would entitle her to a substantial portion of Dali’s estate that he originally left to the Spanish state. If Abel is not Dali’s heir, then perhaps luck just was not in the cards.

See DNA Samples Taken from Salvador Dali's Remains to Settle Paternity Suit, Fox News, July 20, 2017.

July 25, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)