Wills, Trusts & Estates Prof Blog

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

Wednesday, February 10, 2016

Promises Can Be Hard To Keep When It Comes To Caring For Loved Ones

Nursing HomeCaring for loved ones that are aging or suffering from a debilitating disease is a task that many people are willing to take on. Despite the heartache and burdens that are sure to come, the loyalty felt towards another can be more than enough to make any sacrifice worthwhile. But there is often a hitch, request may be made to stay out of nursing and assisted living facilities which can impose a harsh duty on potential caregivers. The choice can put those tasked with the caring into a difficult position as they are faced with honoring their loved one's wishes even when taking care of the person is no longer practical. As a result, abuse, driven from feeling trapped in a difficult situation, can increase as well as neglect when the limits of what can be done by the caretaker are reached. Because of these difficult facts, it is always a good idea to be honest between those in need and those that will carry the burden about lines that, if crossed, will trigger a change. No matter how much someone wants an arrangement to continue, eventually specialized care might be needed and making sure that both parties are prepared for the potential for change will only make the situation better and allow everyone to mentally prepare for what may come.

See Tara Bahrampour, ‘Promise you’ll never put me in a nursing home’, The Washington Post, February 8, 2016.

Special thanks to Naomi Cahn for bringing this article to my attention.

February 10, 2016 in Disability Planning - Health Care, Estate Planning - Generally | Permalink | Comments (0)

Three Doctors Will Control Sumner Redstone's Fate... If They Are Summoned

ArticlePictureLook up the word mogul in the dictionary and a picture of Sumner Redstone could legitimately sit beside it and be accurate in every sense. His multi billion dollar empire includes two of the most powerful corporations in modern media, CBS and Viacom, and makes him one of the wealthiest human beings alive. However, control over that empire is increasingly in doubt as Redstone's health deteriorates which raises the question of how it will be determined if he is no longer fit to lead. Apparently the answer to that question is a two step process involving family members and long time executives as well as a group of three doctors. To rule Redstone incapacitated requires a  majority vote of five individuals, among them his daughter, Les Moonves, and Philippe Dauman, who can call upon the expert opinions of three doctors. The team of doctors, drawn from different hospitals, would then rule on his health which will decide if his assets move to an irrevocable trust that would include the voting shares in his various corporations. Due to an ongoing lawsuit from his former partner it is unknown if this arrangement will last, but the two step process is an intriguing method of ensuring any conclusions on his health are well thought out.

See Keach Hagey & Joann S. Lublin, Doctors Have Key Role in Fate of Sumner Redstone’s Company Stakes, Like Viacom, The Wall Street Journal, February 6, 2016.

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

February 10, 2016 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management | Permalink | Comments (0)

To Give Or Not To Give, That Is The Question

ArticleThe Baby Boomers are generally a wealthy bunch which makes sense seeing as how they have been the generation in charge and at the peak of earnings capacity for years now. But they are now starting to move into the twilight years and will soon represent a community of retirees unprecedented in number. But what will happen to all that hard earned money? In many ways it depends on how they lived throughout retirement with those that saved just enough to make it through being unlikely to leave much behind for the following generations. That fact is likely what is behind the results of a recent survey which revealed only 40% intend to leave behind a legacy for their heirs. But even for those that do no expect to be able to leave anything behind, the inter vivos gift can still allow them to give to their loved ones during the boomer's lifetime. While it might be nice to be able to leave behind a big chunk of change, giving smaller amounts throughout retirement can give great satisfaction by being able to see the good that comes from the gift.


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

February 10, 2016 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, February 9, 2016

Why Keeping Beneficiary Designations Updated Is Important

Beneficiary designationThis article discusses the importance of updating all beneficiary designations in an estate plan. In 2001 the Supreme Court held in Egelhoff v. Egelhoff that the federal law governing ERISA preempted any contradictory state laws that disinherited ex-spouses. This case involved a divorced father who forgot to update the beneficiary designations on his retirement accounts. The stepmother ended up winning because she was still listed as the beneficiary of the retirement account after the divorce. This is a very common problem that people need to be careful to plan ahead for. This article provides a list of the type of common events that will trigger the need to update beneficiary designations in an estate plan. There is also a list of the type of assets through which a person may designate beneficiaries.

See Kyle E. Krull, What is the Big Deal about Beneficiary Designations?, Wealth Management, February 8, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

February 9, 2016 in Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

The Strategy O.J. Simpson And Lance Armstrong Use To Protect Their Assets

Lance and O.J.Many people are aware of the tax deferral benefits of 401(k) plans and traditional IRA accounts, but these types of retirement accounts can also provide asset protection benefits. This column discusses how there are certain retirement assets that a person can protect from creditors in the event of a personal bankruptcy or legal liability. There are some real life examples of this playing out involving both O.J. Simpson and Lance Armstrong. “Mr. Simpson still owns a defined benefit plan from the NFL, valued at over $4 million.  Despite O.J.’s $33 million liability, under ERISA law the former star’s defined benefit plan is protected from the Goldman and Brown families.” Lance Armstrong has also been involved in many lawsuits after his doping scandal but he has used different estate planning techniques like creating trusts to help shield many of his assets.

See Martin Walsh, How O.J. Simpson and Lance Armstrong Protected Their Millions, Wealth Management, February 8, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.  

February 9, 2016 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

How Remarriage Impacts Estate Planning

MarriageThere are many people getting remarried who are not aware of how their new marriage will impact their estate planning situation. As a consequence there are far too many people who do not do enough to plan ahead. This article goes into some detail describing how remarriage can effect just about every aspect of estate planning. People that are entering into another marriage need to be aware about things like the spousal elective share, community and personal property rights, homestead rights, and spousal support requirements. This article also goes into the implications that ERISA has on marriage. It is also extremely important to make sure all the beneficiary designations as well as the will is up-to-date to avoid all the probate issues that will come about from a person dying intestate. Because the laws vary from state to state estate planners will often encounter very complicated issues.  

See John J. Scroggin, Estate Planning Implications of Remarriage, Journal of Financial Planning, February 9, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

February 9, 2016 in Estate Planning - Generally, Estate Tax, Guardianship, Income Tax, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Federal Interpleader Slayer Statute Case Dismissed

JudgmentThis column discusses a recent case involving a Federal Court that refused take a life insurance interpleader case that involved the assertion of a slayer statute. The reason behind the Court’s decision was the pendency of litigation on the same subject in state court. “Harold Henthorn was convicted of murdering his wife, allegedly by pushing her off of a cliff in Rocky Mountain National Park.” Mr. Henthorn was named as the sole beneficiary of his wife’s life insurance policy that had a $1.5 million death benefit, and there were two other life insurance policies that he was also the beneficiary of. There was extensive media coverage over the case that this column analyzes. In this case the Court applied a five-factor test that federal courts use to when exercising jurisdiction over a declaratory matter.

See Jeffrey Skatoff, Federal Interpleader Case Involving Slayer Statute Dismissed, Clark Skatoff PA, February 8, 2016.

Special thanks to Jeffrey Skatoff (Clark Skatoff PA) for bringing this article to my attention.

February 9, 2016 in Current Affairs, Estate Planning - Generally, Wills | Permalink | Comments (0)

Article On European Cross-Border Succession

EUMireia Artigot-Golobardes (Professor, Universitat Pompeu Fabra Law School) recently published an article entitled, Will Regulation 650/2012 Simplify Cross-Border Successions in Europe?, 4 Eur. Prop. L. J. 1 (2015). Provided below is an abstract of the article:

This paper addresses recent changes in European succession law brought about by the European Commission’s "Regulation on jurisdiction, applicable law, recognition and enforcement of decisions in matters of succession." One of the most important issues that this Regulation addresses is the determination of the law applicable to a given succession for nationals of one member state with habitual residence in another member state. The Regulation provides that successions for those who die in this situation are governed by the law of the state in which they had their habitual residence at death. This paper questions whether the Regulation will simplify and reduce transaction costs in cross-border successions from two perspectives: First, from the perspective of whether the Regulation will increase or decrease the application of a given state's substantive succession law, and, second, from the perspective of the effect of its choice of laws rule on property entitlements given the variation in forced inheritance rules and clawback provisions across EU member states. These issues raise important questions about whether the Regulation will bring about the simplicity its drafters seek.

February 9, 2016 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Art And Collectibles Trendy New Way To Avoid Estate Taxes

ScissorsThe taxman is the mortal foe of any family that is facing a stiff estate tax as generational wealth moves it's way down through the family tree. But for some, a novel new way has been found that can lessen the tax impact; portfolios heavy in art and other collectibles that have fungible valuations. Due to the booming market for high end collectibles it is easy to place a valuation on items that, while comparable to the market at the time, will be undervalued down the line as prices rapidly rise. Combined with the fact that appraisals are highly subjective, it allows an estate to undervalue assets, or overvalue when donating to charity, without violating tax laws. However, tax authorities are now paying closer attention to this work around with the IRS creating a team that is dedicated to contesting low valuations. But even with the increased scrutiny, it is unlikely that the practice will decline in popularity due to the relative ease with which taxes can be avoided in many circumstances.

See Robert Frank, Revaluing Family Treasures for the Taxman, The New York Times, February 6, 2016.

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

February 9, 2016 in Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Some Considerations When Seeking To Exclude Estranged Children

WillsAn unfortunate fact of life is that some parents and children do not see eye to eye and, consequently, are not a factor in each others lives. In circumstances such as this it is not uncommon that the parent seeks to exclude the child from inheriting anything from the estate and wish to take measures to assure it. In this situation, the best option is create a will that explicitly disinherits the child. That is the only surefire way to avoid any portion of the estate going to them since intestacy laws tend to strongly favor children even when a spouse is alive. However, a complete exclusion is not always necessary and smaller gifts can be left instead when the relationship has been distant rather than hostile. While some might scoff at a reduced inheritance, giving something when the beneficiary expects nothing can still make one final effort to mend fences even if beyond the grave.

See Quentin Fottrell, Can my 40-year-old long-lost daughter get my estate?, Market Watch, February 5, 2016.

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

February 9, 2016 in Estate Planning - Generally, Wills | Permalink | Comments (0)