Wills, Trusts & Estates Prof Blog

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

Friday, October 28, 2016

Bill Gates Will Not Leave His Fortune to His Children

Bill gatesThe world’s second-richest man does not want to leave his $78 billion fortune to his three children. Bill Gates and his wife are encouraging their children to go to college, get jobs, and have careers. Gates believes that leaving your children huge sums of wealth does not do them any favors, distorting their destiny. The Gates will, however, provide their children with a safety net.

See Amy Graff, Bill Gates Explains Why He’s Not Leaving His Fortune to His Children, SF Gate, October 27, 2016.

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


October 28, 2016 in Estate Planning - Generally | Permalink | Comments (0)

Moving from Investment Management to Wealth Management

Wealth mangementAs investment management becomes commoditized, advisors need to expand their services to avoid fee compression. Clients will increasingly see value outside of investments in things like tax planning, estate planning, and life coaching. As society moves away from investment management, there is a movement toward wealth management. To implement this movement, technology will be instrumental in delivering these commoditized services. 

See Dan Jamieson, Advisors Warned to Expand Beyond Investments, Financial Advisor, October 26, 2016. 

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


October 28, 2016 in Current Events, Estate Planning - Generally, Technology | Permalink | Comments (0)

Article on the Estate Planning Challenges of Digital Assets

Digital assets actElizabeth Ruth Carter recently published an Article entitled, Estate Planning for Digital Assets: Assigning Tax Basis and Value to Digital Assets, LSU 46th Annual Estate Planning Seminar (2016). Provided below is an abstract of the Article:

These materials were prepared in conjunction with the LSU 46th Estate Planning Seminar. They explore the various types of digital assets -- including social media (Facebook, Twitter, Linked In, etc.), audiobooks, music and video files, and bitcoin -- and the estate planning challenges these assets present. These material also consider the federal estate and gift tax issues posed by digital assets, including questions related to small business valuation.


October 28, 2016 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax, Technology | Permalink | Comments (0)

Thursday, October 27, 2016

Article on the Tampon Tax & Its Current Legal Challenges

Tampon tax

Although this Article is somewhat off-topic, I thought readers might be interested in this innovative Article.

Bridget J. Crawford & Carla Spivack recently published an Article entitled, Tampon Taxes, Equal Protection and Human Rights, Wisconsin L. Rev. (forthcoming). Provided below is an abstract of the Article:

In recent months, activists around the globe have harnessed the power of the Internet to raise awareness of the so-called “tampon tax,” an umbrella term to describe sales, VAT and similar “luxury” taxes imposed on menstrual hygiene products. In response to pressure from constituents, five U.S. states and Canada have repealed their tampon tax. Active campaigns are underway in Australia, the United Kingdom and several other countries. Where public pressure has not been an effective technique, those seeking to challenge the tampon tax in the United States have turned to litigation. In four U.S. states, class action lawsuits have been filed seeking repeal of the tax and a refund for back taxes paid, alleging equal protection violations. In the international context, human rights law provides a promising foundation for similar legal challenges to the tampon tax because human rights law takes a capacious approach to gender equality. In the European Court of Human Rights, for example, there are several tax cases that recognize gender-differentiated taxes as a form of impermissible discrimination. This Article explains how the tampon tax violates equal protection and human rights norms. The tax also shows how deeply embedded gender is in matters of tax policy. Full realization of gender equality will require revision of tax laws. 

Girls and women use tampons and sanitary napkins for multiple days every month for at least 30 years because of their biology. At first glance, the tampon tax might appear to be the result of a misclassification of menstrual hygiene products as luxuries, while items like Rogaine and condoms, for example, generally avoid taxation. But these comparisons are inapt, as it is difficult to find a precise male analog to the menstrual hygiene products that women use. Nor is it adequate to explain the existence of the tampon tax as the product of women’s historic absence from the legislature. This explanation is both simplistic and incomplete. Women’s bodies in general and menstruation in particular have been and continue to be the source of great cultural (and legal) unease. Women’s (involuntary) bleeding is meant to happen “out of sight, out of mind,” whereas men’s (voluntary) bleeding in war is meant to be celebrated.

Part I of this Article provides an overview of the sales and similar taxes on menstrual hygiene products. Part II explains why, as a cultural matter, the tampon tax has gone unnoticed. Part III situates consideration of the tampon tax in the context of international human rights. Part IV explores current legal challenges to the tampon tax in the United States and outlines a possible human rights challenge to the tax in Europe. The Article concludes with a discussion of why the tampon tax has become a global issue and why the tax law provides a unique lens for examining issues of gender inequality.


October 27, 2016 in Articles, Current Events | Permalink | Comments (0)

Summary on Estate of Beyer v. Commissioner

EstatetaxSteve Akers recently summarized an estate tax case, Estate of Beyer v. Commissioner. Provided below is a summary of the case: 

This Tax Court case involved a situation in which the parties failed to follow formalities in many respects, perhaps coloring the court's view of the estate's position. The court held that the bona fide sale for full consideration exception to Section 2036 did not apply. Various distributions had been made from the partnership to the decedent or for the decedent's estate after his death (including paying the estate's estate taxes) when the decedent and his estate were no longer a partner, and the court found that an implied agreement for retained enjoyment under Section 2036 existed. No discount was allowed for the assets in a four-year "restricted management account."

In addition, the decedent did not properly make the "five-year averaging election" for gifts to Section 529 accounts, and gift taxes and penalties were imposed.


October 27, 2016 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Robin Williams's Favorite Bikes Raise $600k for Charity

Williams bike collectionRobin Williams’s children donated 87 of his high-end bicycles to charity in an online auction that closed Tuesday. One fan paid more than $40,000 for one of Robin’s favorite bikes—a Futura 2000. Another bidder cashed in on a replica of a 10-speed that Robin’s friend, Lance Armstrong, rode in the Tour de France. Ultimatley, the auction raised $600,000 with bids from over 25 countries. All the money raised goes to the Challenged Athletes Foundation and the Reeve Foundation, two of Robin’s favorites charities. 

See Robin Williams Fave Bicycles Are Gold . . . Haul in Over $600k for Charity!, TMZ, October 27, 2016. 


October 27, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Article on Recent Developments in Elder Law Issues

Elder managementElizabeth Ruth Carter recently published an Article entitled, Elder Law Issues and Recent Developments: 2015–2016 (2016). Provided below is an abstract of the Article:

These materials are part of the 2016 LSU Legislative Update CLE. The paper includes recent ethical developments; scam and abuse prevention and reporting; recent developments in mandate and interdiction; recent developments in Louisiana's medical consent law, recent developments in living wills and advance directives; recent developments with anatomical gifts and bodily remains. Finally, sample forms are included.


October 27, 2016 in Articles, Current Events, Elder Law, Wills | Permalink | Comments (0)

Wednesday, October 26, 2016

Article on Trust Decanting

Trust decantingStewart E. Sterk recently published an Article entitled, Trust Decanting: A Critical Perspective, 38 Cardozo L. Rev. (2017). Provided below is an abstract of the Article:

Until recently, a party seeking modification of an irrevocable trust needed approval from all interested parties, or from a court. The last decade, however, has brought a flood of state legislation authorizing trust decanting – a process by which a trustee “decants” trust assets from one vessel (the original irrevocable trust) into a second vessel (a new trust with terms designed to reflect the settlor’s supposed intent). Most recently, the Uniform Law Commissioners have, in 2015, promulgated the Uniform Trust Decanting Act.

Decanting enable trustees and trust beneficiaries to avoid the cost associated with judicial modification in cases where the irrevocable trust instrument included drafting errors or failed to account for unforeseen circumstances. But the proponents of decanting have largely ignored two significant issues raised by the decanting movement. First, the trustee, who may have been selected for reasons other than intimate knowledge of the settlor’s wishes, is not always in an optimal position to assess that settlor’s intent. In some cases, agency costs (the trustee’s own interest in continuing to receive fees) may cloud the trustee’s judgment about the wisdom of decanting.

Second, decanting increases the potential for trusts to impose external costs on taxpayers and creditors. A number of recent innovations in trust law have expanded asset protection opportunities and enabled creation of perpetual trusts – innovations that enable trust settlors to avoid taxes and creditor claims. Trusts created before these doctrinal changes could not take advantage of these opportunities to impose external costs. Decanting, however, empowers trustees to obtain tax benefits and avoid creditors even when the settlor was willing to create the trust without the inducements provided by modern doctrinal “reform.” Decanting to impose externalities generates social cost without any offsetting social benefit.


October 26, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

The Vatican Publishes New Guidelines for Catholics Wishing to be Cremated

Burial v. cremationOn Tuesday, the Vatican published guidelines for Catholics who want to be cremated, requiring their remains not be scattered, divided up amongst relatives, or kept at home. Any remains must be stored in a sacred, church-approved place in order to remember the dead properly and prevent the appearance of “pantheism, naturalism or nihilism.” The guidelines, however, state that burial remains the preferred method due to resurrection beliefs. 

See Vatican: No More Scattering of Cremation Ashes, Yahoo!, October 25, 2016. 

Special thanks to Logan Fuzetti (Attorney, The Woodlands, Texas) for bringing this article to my attention.  


October 26, 2016 in Current Events, Death Event Planning, Estate Planning - Generally, Religion | Permalink | Comments (0)

How Does the New Jersey Estate Tax Repeal Affect You?

Estat tax repealIt is official—Governor Christie has signed the bill to repeal the New Jersey estate tax. Starting in 2017, the estate tax exemption amount will increase to $2 million with a general tax rate of 7.2% and up to 16% on estates over $10 million. The full repeal goes into affect starting January 2018. 

But, how does this affect you? For those who have already prepared their estate plans, there is not much effect; however, you might be able to simplify your documents, such as those creating a trust for your surviving spouse. For those who domicile in New Jersey, you will no longer need to make substantial gifts during your lifetime because there is no worry for reducing your estate tax burden. For married couples with credit sheltering trusts, it may be a good idea to keep these estate vehicles but there is no longer concern over how much can be included in the trust. For those non-domiciled residents and those wishing to avoid the “death tax,” the incentive to move will be reduced starting in 2018. For those surviving spouses with money left in trust, once the repeal goes into affect, it might be beneficial to consider terminating the trust because the assets will not receive another step-up in basis. Finally, for those considering Medicaid planning, it is more prudent to leave assets in your name instead of giving them away early unless your estate is large. 

See NJ Estate Tax Repeal: How Does This Affect You?, Kevin A. Pollock BLAWG, October 24, 2016. 


October 26, 2016 in Current Events, Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0)