Wills, Trusts & Estates Prof Blog

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

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Tuesday, July 22, 2014

Social Security After Divorce: Not All Is Lost

DivorceIt is a common misconception that when you go through a divorce, you will lose Social Security benefits as an ex-spouse.  Given certain conditions, you are entitled to Social security benefits and need not be married to collect.  Provided below are some relevant facts to be aware:

  • You can receive benefits on you ex-spouse’s record even if they are remarried.
  • Your decision to collect on your ex-spouse’s earnings history will have no impact on the size of their benefits.
  • One individual can have multiple ex-spouses collecting on their earnings history, provided they were married to each spouse for at least ten years.

In order to be entitled to spousal benefits, you need to have been married for at least ten years or currently unmarried.  “Like everything else in Social Security, there are complexities involved here . . . There is no divorce decree anywhere that can preclude you from collecting Social Security benefits as an ex-spouse, provided you’ve met the conditions outlined above.”

See John Wasik, Getting Social Security Benefits After Divorce, Forbes, July 21, 2014.

July 22, 2014 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Article on the Non-Identity Problem

David heydDavid Heyd (The Hebrew University of Jerusalem, Jerusalem, Israel) recently published an article entitled, Parfit on the Non-Identity Problem, Again, Law & Ethics of Human Rights Vol. 8 Issue 1, 1-20 (May 2014).  Provided below is the article’s abstract:

In his recent work, Parfit returns to the examination of the non-identity problem, but this time not in the context of a theory of value but as part of a Scanlonian theory of reasons for action. His project is to find a middle ground between pure impersonalism and the narrow person-affecting view so as to do justice to some of our fundamental intuitions regarding procreative choices. The aim of this article is to show that despite the sophisticated and challenging thought experiments and conceptual suggestions (mainly that of a “general person”), Parfit’s project fails and that we are left with the stark choice between personalism and impersonalism.

July 22, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Paying vs. Playing

Texas a&mTexas A&M recently paid Cedric Ogbuehi more than $50,000.  The star offensive tackle said that he would have fled to the NFL had the school not come through with the money to pay for the costly insurance premium.  Ogbeuehi said he cannot afford the insurance that would cover a drop in draft position because of injury. 

Although no NCAA bylaws were violated and the money came from a Student Assistance Fund set up by the association, the problem becomes defining the fine line that between paying for playing.  “We can argue about the word ‘paid,’ but Ogbuehi was awarded that money because he’s an athlete.  It was given in good faith and ostensibly to keep the kid in school, but it was there because he’s a highly skilled player. 

This may be a recruiting advantage available to other schools, but for now it is an advantage that A&M has gained better than anyone.  As some onlookers have pointed out, a recruit could demand insurance coverage out of the Student Assistance Fund as a condition of signing.  It then becomes a case of how the school parcels out its recruiting promises. 

See Dennis Dodd, Texas A&M Paid Star Tackle $50k to Stay in School; What Could Go Wrong? CBS Sports, July 21, 2014.

July 22, 2014 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

The Reasoning Behind Hoffman’s Surprising Estate Planning Decisions

HoffmanAs I have previously discussed, Philip Seymour Hoffman’s will included a request that his son, Cooper, be raised in cities other than Los Angeles. Through reports by Hoffman’s accountant, the will provision and other surprising estate planning decisions by Hoffman were intended to serve a protective purpose for his children. Hoffman was worried about his children becoming dependant on a large trust fund and took steps to prevent that outcome, including limiting the uses of the trust for Cooper to "education, support, health, and maintenance." 

See Suzy Byrne, Why Philip Seymour Hoffman Didn’t Leave His Fortune to His Children, Yahoo, July 21, 2014.

July 22, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

The Artist Pension Trust

ArtRunning the World’s largest Private Art Collection is not all fun and games. Moti Shniberg used his background in data-mining tech startups to create the Artist Pension Trust, which has collected 10,000 pieces of art from nearly 2,000 artists worldwide. The trust has attracted the support of big name artists and art supporters based on its mission to help artists make more profit off of their art by making the trust a charitable middle man rather than for profit art dealer. The collection is so large that it can be difficult to manage all of the pieces and selling them may turn out to be harder than collecting them. There is also some risk that the artists are taking on when they join and add their art to the collective. The trust has just begun to sell some of the pieces donated to it ten years ago.

See James Tarmy, The Problem With Selling the Largest Private Art Collection in the World, Bloomberg, July 15, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 22, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Using Online Calculators for Estate Planning

Mr. CalculatorThere are many useful and low cost tools on line to assist with estate planning. One such tool is estate planning calculators, which range from very simple generic calculators to those that compute loan amortization. The variety of types of calculators and companies offering them gives both estate planners and their clients many options to choose from to find the one that is right for the task at hand. They can assist with a wide range of tasks, such as financial planning and calculating taxes. There are even apps for the Iphone and iPad.

See Donald Kelley, Internet Calculators for Estate Planners, Wealth Management, July 16, 2014.

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

July 22, 2014 in Estate Planning - Generally, Technology | Permalink | Comments (0) | TrackBack (0)

Charitable Extenders Bill Passes the House

LawH.R. 113-4719 went from the Rules Committee to the House last week. The bill, which includes charitable extenders among its five measures, overcame a motion to send it to the Ways and Means Committee to limit the extenders and was approved by the House. Though White House senior advisors will likely recommend that President Obama veto the bill, it is unclear what the President will do if the bill comes across his desk.

See, House Approves Charitable Extenders, Including a Permanent IRA Rollover, Charitable Planning, July 18, 2014.

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

July 22, 2014 in Estate Planning - Generally, Gift Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

529 Plans for Grandparents


Many grandparents want to help their grandchildren pay for college, but do not know the best way of going about it.  According to a Fidelity Investments study, nearly half of grandparents expect to contribute to their grandkids’ college savings, with more than a third expecting to give $50,000 or more.  While very generous and thoughtful in nature, these contributions can also have significant tax and estate planning benefits for grandparents. 

A 529 plan is a college savings investment account that provides tax-free growth as long as the money is put toward tuition and most types of college expenses such as fees and books.  Grandparents can use 529 accounts to procure tax deductions or diminish the value of their taxable estates. 

One way to showcase 529 accounts is to highlight their advantages over other savings strategies.  For example, grandchildren who receive Series EE bonds as gifts can later be inundated with federal income taxes on the interest if they do not use funds for college.  Contrastingly, a 529 plan provides for tax-free distribution.  It also allows grandparents to give the funds to another grandchild if the intended recipient does not go to college. 

One of the caveats of a 529 plan is that it could make a grandchild ineligible for financial age.  This is because once the money is withdrawn for the beneficiary, it will count as income that schools use to determine financial aid awards.  However, grandparents can avoid this problem by waiting until their grandchild’s junior or senior year to distribute the money. 

See Robyn Post, Your Practice—Selling Grandparents on the Perks of 529 College Savings Plans, Reuters, July 18, 2014.

July 21, 2014 in Elder Law, Estate Planning - Generally, Gift Tax, Income Tax | Permalink | Comments (0) | TrackBack (0)

Death and Debt


When someone dies, their assets become the property of their estate.  Before an estate can distribute assets to beneficiaries, each estate is obligated to pay all debts, costs, taxes and other liabilities due. 

Yet who manages this?  When writing wills, it is usual to appoint an executor to handle the tasks associated with an estate.  Under “fiduciary duty,” executors are legally required to act with complete and transparent good faith while carrying out the deceased’s wishes. 

If no will is written, a state’s probate court can appoint an administrator, who has the same powers as an executor.  While there is a hierarchy of people who are asked to take on the role, nobody can be forced to be an executor or administrator unless they want to be. 

When debt is passed on there are two key things to understand: (1) The debt does not die with the decedent, and must usually be paid; (2) nobody can inherit debt.  If the estate does not have enough money to cover debt, lenders will write off their losses.  With some rare exceptions, heirs are liable for the deceased debts.  These exceptions include: surviving spouses in community property states, adult children of a late parent who could not pay for his or her long term care, and heirs legally responsible for managing the estate.

See Peter Andrew, What Happens to Card Debt When Someone Dies, Desert News, July 18, 2014.

July 21, 2014 in Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (0) | TrackBack (0)

Wells Fargo Terminated As Trustee

Wells fargo

On Thursday, a Circuit Judge in Wisconsin terminated Wells Fargo Bank as trustee of the Chester Bible scholarship trust, furnishing control to the Baraboo Community Scholarship Corporation (BCSC). 

For over a year, BCSC and Wells Fargo have disputed over the administration of the trust, which since 1991 has provided generous scholarships to Baraboo High School graduates.  Yet in recent years, Wells Fargo has raised its fees for administering the fund while decreasing scholarship awards. 

The judge agreed that BCSC would better serve future scholarship recipients since it is a nonprofit operated by volunteers who would administer the trust for free.  “It is no longer economic to continue the trust by Wells Fargo because it failed to administer the trust effectively,” wrote Judge Patrick Taggart.  Because of the legal battle, Wells Fargo charged nearly $27,000 in legal and accounting fees to the trust in 2013. Judge Taggart denied Wells Fargo’s request to have its attorneys’ fees be paid by BCSC.

See Ben Bromley, Judge Rules Against Bank in Trust Battle, Baraboo News Republic, July 19, 2014.

July 21, 2014 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)