Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Thursday, January 29, 2015

Leave Your Mark Through Impact Investing


Over the past generation, many talented people have tried to transform capitalism by using the market to solve social problems.  These people have created organizations that are part profit-oriented and part purpose-oriented. 

Ben & Jerry’s ice cream led the first wave in this sector of companies, but now there is a burgeoning array of social-capitalist tool s to address problems—raging from B Corporations to social impact bonds. 

Impact investing is probably the most promising of these tools.  Impact investors seek out companies that are intentionally designed both to make a profit and provide a measurable and accountable social good.  Impact funds are frequently willing to accept lower financial returns for the sake of doing good. 

While there are many roadblocks to impact investing, it is now entering the mainstream as new impact funds are being created.  Although impact investing will not replace government or be a panacea, it is one way to address social problems.  If you want to leave a mark on the world, find a way to get involved in a socially useful investment proposition.

See David Brooks, How To Leave A Mark, The New York Times, Jan. 27, 2015.

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

January 29, 2015 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Green Burials and Cremations


Unlike other living creatures on this earth, humans treat dying as a solemn rite of passage.  Many of us bury our dead with a ceremony, and many of us believe in an afterlife. 

This idea is reflected upon in the Green Cemetery Initiative, a nonprofit trust in rural central Massachusetts.  The main idea motivating the Green Cemetery Initiative is that instead of caring so much about preserving our own dead bodies, why not care more about preserving the natural environment—“the unspoiled beauty of God’s creation.”  According to the Green Burial of Massachusetts, a partner with the trust, “Each year we bury approximately 827,060 gallons of toxic embalming fluid, 104,272 tons of steel, 2,700 tons of copper and bronze, 30-plus million board feet of hardwood, and 1,636 tons of reinforced concrete.” 

The key feature of the initiative is that the deceased would be buried in biodegradable coffins, without embalming fluids and concrete fortresses.  Engraved organic flagstones would serve as grave markers. 

See Michael Guillen, Final Gestures, U.S. News & World Report, Jan. 28, 2015.

January 29, 2015 in Death Event Planning, Estate Planning - Generally, Religion, Trusts | Permalink | Comments (0) | TrackBack (0)

Sisters Forced to Repay Inheritance

Elaine Briscoe

After two sisters were given  £100,000 following their father’s death, they are being forced to pay it all back when the insurance company sent them the wrong man’s money. 

Elaine Briscoe and Sandy Millington received the six-figure check after a three-year battle to track down the missing pension of Rob Gent.  Immediately, the sisters split £40,000 between their four children and spent £20,000 more. 

Within a month after receiving the check, Friends Life said the sisters were given a pension belonging to another customer with the same name.  The pensions and insurance companies subsequently threatened the sisters with legal action unless they gave it all back. 

The pair was forced to sell their father’s house in an effort to repay the money they had spent.  They also had to borrow from friends and other relatives to make up the full amount including interest. 

See SWNS Reporter, Sisters Given £100k Life Insurance for Father’s Death Told to Pay It ALL BACK After Getting the WRONG Man’s Money, SWNS.com, Jan. 29, 2015.

January 29, 2015 in Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

CLE on Gift Tax Returns

CLE Photo

The American Bar Association Section of Real Property, Trust and Estate Law is holding a CLE entitled, Gift Tax Returns: A 30,000-Foot Overview, on February 17th from 1:00-2:30 PM ET via webinar.  Here is why you should attend:

With gift tax return filing season in full swing, it is important to consider what happens after the ink dries on the gift tax return.

This program provides an overview of important issues to consider when making and reporting taxable gifts of hard-to-value assets, and how to handle an audit of a gift tax return.

Topics our panelists will cover include:

  • Planning for an eventual audit at the gift-giving stage (including IRS challenges to gifts of interests in closely-held entities);
  • Reporting complicated transactions on gift tax returns (including working with appraisers and complying with adequate disclosure rules); and
  • Defending the gift tax return when the audit letter arrives (including classifying issues, privilege, discovery, settlement, and litigation).

January 29, 2015 in Conferences & CLE, Estate Planning - Generally, Gift Tax | Permalink | Comments (0) | TrackBack (0)

Lesson For Young Adults From Cory Monteith

Cory MonteithThe sudden and unexpected death of Glee star Cory Monteith provides an example of the importance of young adults not putting off estate planning, especially having a will. Resolution of Monteith's estate was delayed for a year-and-a-half due to complications over whether an exception was warranted to the general intestate rule that his parents would inherit from his $810,000 estate equally. The issue is seemingly resolved by his father stating that he does not wish to inherit anything from his son's estate, but not before he signed a document that stated he did not have communication with his son for many years and did not pay child support. Monteith's father later claimed that he did not know what the document said and that it was untrue. If Monteith had a will, the public blame game and finger pointing by his parents, who each accused each other for his father's absence in his life and argued over whether that attributed to the young star's death, may have been avoided.

See Danielle Mayoras & Andy Mayoras, Cory Monteith Shows How Even Young Adults Need Wills, Forbes, Jan. 28, 2015.

January 29, 2015 in Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (0) | TrackBack (0)

Importance of Knowing Line Between Individual and Representative Capacity

Gavel BWAfter the death of her mother, Kathleen Kozinski, who was named as both trustee of a trust created by her mother and personal representative of her mother's estate, filed a notice of trust and a petition for administration of the estate in two separate actions, which were then consolidated. Two beneficiaries filed a petition for review of Kozinski's compensation as trustee and representative, but did not name or serve her personally.

In Kozinski v. Stabenow, a Florida appellate court held that Kozinski should have been served in her individual capacity and reversed the trial court's denial of her motion to dismiss.

See Luke Lantta, Representative Versus Individual Capacity: It Can Make A Difference, Bryan Cave, Jan. 28, 2015.

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

January 29, 2015 in New Cases, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Trust Beneficiaries Seek $4.5 Million From UBS Financial Services

Gavel2Trust beneficiaries have brought suit against UBS Financial Services alleging that the company mismanaged trust funds, which was a breach of fiduciary duty. The beneficiaries are seeking a judgment of $4.5 million. One beneficiary bringing suit is Sanchez Carmona, who claims that in addition to mismanagement of the trust the company also failed to notify her that she was a beneficiary of the trust after her husband died in 2003, falsely listed her husband as a resident of Puerto Rico, and claimed in a 2010 government filing that he was still alive.

 See Brian Mahany, UBS Financial Services Accused of Trust Fraud, The National law Review, Jan. 28, 2015.

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

January 29, 2015 in New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Video on Mandatory Reporting of Elder Abuse

LawDavid Tate (San Francisco/California litigation attorney) created a video entitled, Mandated Elder & Dependent Adult Abuse Reporting – Then What’s Next – Community Response. In the three -minute video, Tate describes what happens after elder abuse is reported to state agencies and what the reporter of abuse should and must do under California mandatory reporting laws. Tate suggests three areas of improvement to help reduce elder abuse:

  1. additional resources
  2. education and awareness
  3. better developed and coordinated community response

January 29, 2015 in Elder Law | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 28, 2015

Choosing The Best IRA For You


Today Americans are faced with daunting choices about their retirement savings.  In addition to choosing portfolio allocations on their own, they must decide on the different structures to use for their investments. 

When saving for retirement outside of an employer-sponsored qualified such as a 401(k) or 403(b), many Americans choose an individual retirement account, which offers tax advantages.  However, there are a number of rules about IRAs investors must understand.  “People don’t usually know all the rules about IRAs, and there are lots of areas that can become a trap.” 

With a traditional IRA, contributions may be tax-deductible.  Earnings grow tax-deferred, and account owners pay taxes when they withdrawal money.  This generally happens in retirement.  There are no income restrictions on contributions, but account owners must begin taking required minimum distributions at age 70 ½. 

With a Roth IRA, there are no age restrictions for contributions, which are made with after-tax dollars.  Earnings may withdrawn tax-free and without penalty after age 59 1/2 , provided the account has been open for at least five years.  Unlike traditional IRAs, Roth IRAs have no required minimum distribution.  

Workers whose income is too hight to qualify for a Roth IRA will have to opt for a traditional IRA; yet, investors say early planning regarding IRA contributions can reduce tax headaches after retirement.  The key is to avoid heavy taxation in retirement by balancing contributions to tax-deferred and non-tax-deferred accounts. 

See Kate Stalter, Roth IRA vs. Traditional IRA: Which Is Right for You? U.S. News and World Report, Jan. 26, 2015.

January 28, 2015 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Estate Planning To-Do List

Estate plan 2

January is generally a busy month for estate planners as clients follow up on resolutions to get their estate plans in order.  Regardless of whether you are hearing from clients, consider being proactive with them since the beginning of the year is a perfect time to handle many estate planning tasks. Below is list to help update and review clients’ estate plans.

  1. Make exclusion Gifts Early.  Although many clients know that each year they can make annual exclusion gifts, they may not know the best possible time to make these gifts is at the beginning of the year.  This way, if something were to happen to a client during the course of the year, the value of the gift would already be outside of the estate for estate tax purposes. 
  2. Fund Revocable Trusts.  Help clients put assets into a revocable trust in order to provide quick access in the event of incapacity or death, and to keep personal affairs private. 
  3. Check Beneficiary Designations.  A common and potentially costly mistake involves outdated or never signed beneficiary designation forms.  For many clients, life insurance policies and retirement benefits represent valuable assets and if these are incorrect, making changes can be expensive or even impossible.
  4. Review Named Fiduciaries.  Choosing fiduciaries in an estate plan is critical.  Moreover, you must review these fiduciaries on a regular basis.  While a client may have named the right person or institution at a certain point in time, subsequent changes could have altered their situation. 
  5. Get Procrastinators to Act.  Even though it can be difficult to motivate an unmotivated client, an unexpected incapacity or death is even more difficult for a family and is not a rare occurrence.  It is critical to lay out your client’s options and ensure they understand the detriments of failing to have an estate plan in place. 

See Tracy Craig, Estate Planning Checklist: 5 Things to Do Now, Financial Planning, Jan. 27, 2015.

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

January 28, 2015 in Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)