Wills, Trusts & Estates Prof Blog

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

Tuesday, August 14, 2018

Why are Nursing Homes Drugging Dementia Patients Without Their Consent?

NursinghomeAccording to government data, nursing homes are still giving dementia patients medication to treat schizophrenia, mostly for its sedative purposes rather than to treat the disease. The usage has gone down from 1 in 4 nursing homes in 2012 to 1 in 6 nursing homes in 2018, but the truth of the matter is that these facilities are still administrating an improper drug, often without a necessary diagnosis or the patient's consent.

Why? The reasons include, "misperception by nursing home staff that the medications can help people with dementia; a lack of awareness of their dangers, despite the black box warnings; lack of training in dementia care; and, perhaps most significant, to compensate for understaffing. Nursing homes have been exaggerating levels of nursing and caretaking staff for years, according to an analysis of federal data by Kaiser Health News."

See Hannah Flam, Why are Nursing Homes Drugging Dementia Patients Without Their Consent?, Washington Post, August 10, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

August 14, 2018 in Current Affairs, Elder Law, Guardianship | Permalink | Comments (0)

Monday, August 13, 2018

The Time May be Right for Land-Value Taxes

NycThe tax system is based on property values rather than land values, and landlords in cities such as New York City and San Francisco definitely feel the benefit by driving up rent to tenants. Taxes on land have long had a magnetic attraction for liberals and economists, and the time for them may just be blooming.

For economists, they are are enticed by land-value taxes because of their efficiency. The supply of land is finite, and thus taxes on it cannot lower the supply and increase price. As a result, as long as landlords are competing with each other for tenants—whose numbers and willingness-to-pay are unaffected—the tax cannot, in theory, be passed on through higher rents.

Land-value taxes are hard to implement as land is difficult to value. Its price is not recognized directly when property is sold. Some cities in Pennsylvania have tried to levy a form of land-value tax, but the valuations of the land are still controversial.

See The Time May be Right for Land-Value Taxes, The Economist, August 9, 2018.

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

August 13, 2018 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

3 Tax Breaks That May be Better in the Long Run

The tax overhaul that was pushed through Congress last year, the Tax Cuts and Jobs Act (TCJA), has left some agencies and professionals still grappling with its effects. Many of the changes have to do with the little details of taxes and short-term tax benefits, that may not be the best thing to do for greater benefits later. The tax changes and exemption increases are not yet permanent, and until that time they should be deemed temporary. Mitchell Drossman, national director of wealth planning strategies at U.S. Trust explains, “This tax law is a temporary provision because most of the individual tax provisions sunset at the end of 2025.”

Short-term benefits may look desirable, but here are three tax breaks that may be better in the long run:

  • Estate Tax
    • For the very wealthy, an important question is whether to make substantial gifts to heirs now or to leave it to them later in a will. It has become a big issue because the estate and gift tax exemption is now $11 million per person or $22 million for a couple. If they gift them now, the recipients will have to only pay capital gains tax rather than estate tax, and the gifting party will end up saving on taxes. But debating a large gift solely on the basis of taxes is a difficult decision, and advice may need to be sought.
  • Capital Gains Tax
    • Indexing an investment’s purchase price to inflation could also reduce the amount of a loss a taxpayer could claim as a deduction in the long run. Not all investments rise. And the ones that lose money can be carried forward on tax returns until future gains soak them up.
  • Charitable Giving
    • The standard deduction has been increased to $12,000, and there is no itemized deduction for charitable giving. For those that are privy to donating a certain amount that is less than this threshold, they may worry about how to achieve their goal of giving while receiving the benefit of the deduction. One solution is front loading a donor-advised fund, allowing them to give each year while initially getting over the itemized deduction amount.

See Paul Sullivan, 3 Tax Breaks That May be Better in the Long Run, New York Times, August 10, 2018.

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

August 13, 2018 in Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Article on Homestead: A (New) Hope

HomeThomas E. Simmons recently published an Article entitled, Homestead: A (New) Hope, 63 S.D. L. Rev. 75-130 (2018). Provided below is an abstract of the Article:

A finely-tuned balancing of the free functioning of private and commercial enterprise against a family's interests in shelter and a home is at the heart of homestead exemption laws. In South Dakota's history, this balancing act has been displayed over a 145-year history in the form of legislative enactments, judicial decisions, and referendums. This history illuminates the expression of values against the dynamics of rule-making. A previously published article in this review, Prequel to Homestead, outlined South Dakota's homestead laws under the contemporary statutory framework and also considered the constitutional history of homestead laws leading up to South Dakota's becoming a state in 1889. This article picks up where the prior article left off and presents judicial decisions dealing with the constitutional ambits of the homestead exemption beginning in 1889 and continuing through today. It concludes with an assessment of an unresolved homestead issue in the context of asset protection: whether a trust-owned or entity-owned home qualifies for homestead protection rights.

The policy of the law is to preserve a home for the family even at the sacrifice of just demands.

 

August 13, 2018 in Articles, Disability Planning - Property Management | Permalink | Comments (0)

What is Micro Estate Planning and do You Need it?

BabyhandEstate planning does not always have to be complex or expensive, but every person should have a "traditional" estate plan in plan. This is even more important for those with dependents and the court will have to establish guardianship according to the wishes dictated in your will. But what about the time - days or even hours - right after an accident or a death? That is where "micro estate planning" comes into play.

Before legal guardianship can be established, a separate legal document can be drafted to clarify what a babysitter should do or should call in the case of an emergency.  Orange County, California estate attorney Darlynn Morgan explains, “If there is no one with clear legal authority the police must call in child protective services (CPS) and the child will go into their custody.”

If you have underage children, ask your estate attorney about adding a separate document to your plan that protects your children when they need it the most.

See Robert Palgiarini, What is Micro Estate Planning and do You Need it?, Forbes, August 8, 2018.

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

August 13, 2018 in Current Affairs, Estate Planning - Generally, Guardianship, Wills | Permalink | Comments (0)

Sunday, August 12, 2018

CLE on Planning for Individuals with Chronic Illnesses

CLEThe Section of Real Property, Trust and Estate Law of the American Bar Association is holding a webinar entitled, Planning for Individuals with Chronic Illnesses, on August 21, 2018 at 12:00 PM - 1:30 PM CT. Provided below is a description of the event:

Many clients are affected by chronic illnesses and a large number of those are under 64. This program will hopefully help you identify clients affected by chronic illness, understand more planning opportunities, and advise them and their families accordingly.
 
This program will cover:
 - Income tax planning
 - Investment and financial planning
 - Insurance planning
 - Disability planning
 - Competency and cognitive issues
 - Estate planning

August 12, 2018 in Conferences & CLE, Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Guardianship, Income Tax, Trusts, Wills | Permalink | Comments (0)

Want to ‘Age in Place’? Make Sure Your Home has These 6 Things

RemodelNearly 90% of people over age 65 want to stay in their homes for as long as possible, according to research by the National Conference of State Legislatures with AARP Public Policy Institute. But many people make the mistake of waiting until they already have health or mobility issues before renovating their home to accommodate their increasing age. Here is a list of a few projects or design changes that your home may require to live your golden years in your home comfortably.

  • Walk-in Shower
    • A walk-in shower can be a modern replacement to a standard shower head over a bathtub, but a customized walk-in shower can cost up to $15,000 or more depending on the size and layout of the bathroom.
  • Grab Bars
    • If a walk-in shower is not an option or you simply can't get rid of your beloved bathtub, a grab bar can me an easy fix. Also having a grab bar in other areas of your home is a good idea to prevent falls in other rooms.
  • First-Floor Master Suite
    • This will alleviate the necessity of constantly going up stairs to your bedroom and prevent arthritic pain and falls.
  • Door Lever Handles
    • For those with arthritis, even turning a doorknob can be painful. Changing out knobs to levers can be a solution.
  • Carpeting
    • Not only is carpeting less slippery than tile, wood, or laminate, it can also cushion the impact of a potential fall.
  • Pullout Drawers
    • Pullout drawers in cabinets can be convenient for any age to make dishes and pans more accessible. Using them in below or above the countertop can alleviate the need to bend over or reach over one's head in the kitchen as often.

See Daniel Bortz, Want to ‘Age in Place’? Make Sure Your Home has These 6 Things. Washington Post, August 8, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.

August 12, 2018 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Saturday, August 11, 2018

IRS Issues Private Letter Ruling Regarding QDOT Election Extension Granted

QdotOn July 27, 2018 the Internal Revenue Service issued a private letter ruling regarding QDOT election extension:

Decedent passed away leaving Surviving Spouse, a non-U.S. citizen, as the beneficiary of Decedent's estate. Surviving Spouse was the trustee of Trust 1 and executor of Decedent's estate. A provision in Trust 1 stated that the trustee was to distribute outright the trust estate to Surviving Spouse. Surviving Spouse was advised by an accountant and a law firm that to claim a marital deduction for the estate, a Qualified Domestic Trust (QDOT) was required. Trust 2 was created with a QDOT election and the estate claimed a marital deduction on Form 706. After Form 706 was filed, additional estate assets were discovered. Decedent's estate requested an extension of time under Sec. 301.9100-3 to make a QDOT election under Sec. 2056A(d) on the subsequently discovered assets.

Under Sec. 2001(a) there is a tax imposed on the transfer of a taxable estate of every U.S. decedent citizen or resident. The value of the taxable estate is determined by deducting amounts passed to the surviving spouse from the gross estate. Sec. 2056(a). Section 2056(d)(1)(A) states that if a surviving spouse is not a U.S. citizen, no deduction is allowed under Sec. 2056(a). Section 2056(d)(2)(A) provides that property passing to a surviving spouse in a QDOT is exempted from treatment under Sec. 2056(d)(1)(A). For a trust to qualify as a QDOT, three requirements must be met. First, the trust instrument must have at least one U.S. citizen or domestic corporation trustee with the right to withhold estate tax from principal distributions of the trust. Second, the trust must meet the Sec. 2056A(b) tax collection requirements. The third requirement is that the executor must elect QDOT treatment. Regulation 301.9100-3 allows for an extension of time to be granted if the taxpayer acted reasonably and in good faith and the relief granted will not prejudice the interests of the government. Regulation 301.9100-3(b)(1)(v) states that a taxpayer will be deemed to have acted reasonably and in good faith if the taxpayer reasonably relied on a qualified tax professional who failed to make, or advise the taxpayer to make, the election. Here, the Service determined that Surviving Spouse met the requirements of Sec. 301.9100-3 and granted an extension of 120 days from the date of the letter to make a QDOT election on the subsequently discovered assets.

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

August 11, 2018 in Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Adulting: Planning for Life When You are Least Expected to Live

Estate-planning-thinkstock-780x520Many clients that create an estate plan only plan on their inevitable death rather than a "worst case scenario." Catastrophes such as plane crashes, car wrecks, or other sudden life-ending events should be planned for, as well as catastrophes that do not end in death but rather incapacity or the inability to work.

Every individual over the age of 18 should have a power of attorney. A power of attorney grants your agent significant authority to act on your behalf. Obviously, you should choose an agent whom you implicitly trust. A health care proxy similarly appoints an agent to make medical decisions on your behalf in the event you are unable to express your wishes.

"Marriage to a person does not give you automatic authority to access their individual financial accounts. Living with your parents does not give you the right to access their accounts, nor can they access yours. In the event you do not have a power of attorney, your spouse and children are barred access to your individual assets, which they may need to survive. In the event an agent is not appointed, your family may be forced to request court intervention for the appointment of a guardian or conservator, which is an emotionally difficult and expensive process."

See Cori A. Robinson, Adulting: Planning for Life When You are Least Expected to Live, Above the Law, July 31, 2018.

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

August 11, 2018 in Death Event Planning, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Friday, August 10, 2018

Article on Restricted Charitable Gifts: Public Benefit, Public Voice

Charity2Susan N. Gray recently published an Article entitled, Restricted Charitable Gifts: Public Benefit, Public Voice, 81 Alb. L. Rev. 565-608 (2017-2018). Provided below is the beginning of the introduction to the article.

Donors who contribute to charities or create new charities often have specific intentions about the use of their donated assets. One donor may want to ensure that the charity follows the donor s personal views about how best to address climate change. Another donor may want to support an already established program for homeless youth. And a third donor may want to devote resources to finding a cure for the Zika virus. These donors may impose restrictions on their gifts, trying to require the charity to honor their wishes over time, but over time, things change. What if the donors views about climate change become outdated and the charity identifies strategies that the charity concludes will be more effective? What if the charity wants to expand its program for homeless youth to include veterans or mothers with children? And what if scientists find a cure for the Zika virus, but plenty of other mosquito-borne viruses continue to plague humans?

August 10, 2018 in Articles, Estate Planning - Generally | Permalink | Comments (0)