Wills, Trusts & Estates Prof Blog

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

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Wednesday, April 16, 2014

IRS Gives Guidance on Same-Sex Marriage Recognition for Retirement Plans

RingsThe IRS has issued guidance on the effect the Windsor decision has on marriage recognition for retirement plans. In light of Windsor striking down Section 3 of DOMA, the question arose of how retirement plan benefits that hinge on the recognition of a legal marriage should be handled.

In Notice 2014-19, qualified retirement plan administrators must amend retirement plans to recognize legal marriages of same-sex couples as of June 26, 2013. However, retroactive recognition prior to that date is not required.  Recognition can be limited to couples that are domiciled in states that recognize their marriage for plans dated June 26 – Sept. 16, 2013, but all valid marriages must be recognized after Sept. 16, 2013, even if the couple is no longer domiciled in a state that recognizes the marriage.

See Alistair M. Nevius, Guidance Issued on Application of Windsor to Retirement Plans, Journal of Accountancy, Apr. 7, 2014.

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

April 16, 2014 in New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 15, 2014

Chances of Getting Audited Extremely Low


This year, the IRS will have the least amount of agents auditing returns since the 1980s.  This also affects taxpayer services, with millions of phone calls to the IRS going unanswered.

Last year, the IRS audited less than 1% of all returns, which is the lowest since 2005.  IRS Commissioner John Koskinen says this year “the numbers will go down.”  Of course, the more you make, the more likely you will be audited.  Only 0.9% of people making less than $200,000 were audited in 2013, compared with 10.9% of people making over $1 million. 

Koskinen believes the IRS can scrutinize more returns, and collect billions more in revenue, if it has more resources.  The president’s budget proposal predicts that the IRS can collect an additional $6 for every $1 increase in the agency’s enforcement budget.

See Steven Maimes, Chances of Getting Audited by IRS Lowest in Years, The Trust Advisor, Apr. 14, 2014.

April 15, 2014 in Income Tax | Permalink | Comments (0) | TrackBack (0)

The Road to Retirement


The path to retirement can be difficult.  Here are eight rules of the road that can help you stay on track towards achieving your long-term goals:

  1. Try and save 10-15% of your income each year and make sure and get any company match.
  2. Don’t be too risk averse with your investments.
  3. Maximize the use of tax-advantaged accounts like IRAs, 401(k)s, HSAs, or deferred annuities.
  4. Plan on needing 85% of your preretirement, after-tax income when in retirement.
  5. Aim to earn at least eight times your ending salary before retirement.
  6. Construct a financial plan that can be successful even if returns are way below average.
  7. Consider building some inflation protection into your portfolio.
  8. Cover essential expenses in retirement with guaranteed income from Social Security, pensions, and annuities.

See Fidelity Viewpoints Team, 9 Rules of the Road to Retirement, Forbes, Apr. 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.

April 15, 2014 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

The Secrets to Longevity


According to the world’s oldest person, the secret behind her longevity is sushi and sleep.

Misao Okawa turns 116 years old tomorrow and credits oily fish such as mackerel for her longevity as well as her eight hours of rest every night.  Okawa moved into a care home 18 years ago at the age of 98.  Her husband Yukio passed away in 1931.  She has an elderly son, 94, daughter, 92, four grandchildren, and six great-grandchildren.

See Sushi and Sleep Are the Secrets to Longevity, According the World’s Oldest Person, Fox News, Mar. 3, 2014.

April 15, 2014 in Disability Planning - Health Care | Permalink | Comments (0) | TrackBack (0)

Disclaimer by a Beneficiary Is a Transfer for Medicaid Purposes


The testator’s will created a trust for his surviving spouse giving her income for life and authorizing the trustee to invade principal for the surviving spouse and their issue for health, education, maintenance, and support.  The trust also gave the trustee the power to terminate the trust should further administration become impractical.  On termination, the trustee was to pay the trust property to the income beneficiary.  The trustee terminated the trust under this provision and the surviving spouse then renounced any interest in the trust property which was delivered directly from the trust to the couple’s son and daughter.  The surviving spouse applied for Medicaid benefits approximately 13 months after the termination of the trust.  In a case of first impression, a Pennsylvania court upheld a determination by an administrative law judge disqualifying the spouse from benefits for a period of time, holding that the renunciation was a transfer of assets for Medicaid purposes.  Schell v. Department of Public Welfare, 80 A.3d 844 (Pa. Commw. Ct. 2013).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

April 15, 2014 in New Cases, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

CLE on Estate Planning Skills

CLEThe ABA Section of Real Property, Trust and Estate Law is presenting a CLE entitled, 2014 Skills Training for Estate Planners.  The Fundamentals course is on July 14-18, 2014, while the Advanced Topics course is on July 16-18, 2014.  Provided below is a description of this event:

The annual Skills Training for Estate Planners CLE program is for attorneys who practice, or plan to practice, estate planning law. This popular program has two courses of study:

The Fundamentals course is perfect for young or transitioning lawyers new to the practice and provides them with a strong educational experience focused on the “how to” of estate planning.

The Advanced Topics course focuses on current areas of interest and importance to experienced estate planning lawyers and is an excellent opportunity to further expand their knowledge and skills.

This institute-type program provides a comprehensive CLE experience with coordinated sessions that build upon one another. The sessions are led by an outstanding faculty consisting of experts in all aspects of estate planning and include time to speak with the presenters. It’s held annually at New York Law School in the Tribeca neighborhood of downtown Manhattan.


April 15, 2014 in Conferences & CLE, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

A Quick Glance at Special Needs Trusts

TrusttileA special needs trust permits people to remain eligible for public benefits such as Medicaid and Supplemental Security Income, while taking supplemental income. A first-party special needs trust is only available to those who qualify or expect to need public benefits but have limited income to pay for their care. These trusts are good for people expecting a large inheritance or settlement that might disqualify them from receiving public benefits.

See Elizabeth I. Liu, Intro to First-Party Special Needs Trust, Wealth Strategies 2.0, April 12, 2014.

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

April 15, 2014 in Trusts | Permalink | Comments (0) | TrackBack (0)

Article on Stealing van Gogh

Van GoghRobert L. Moshman (Attorney, New York and New Jersey) recently published his article entitled, Stealing van Gogh, The Estate Analyst (Mar. 2014). An excerpt from the article is below:

In 1888, Vincent van Gogh stayed up for three nights in a row to paint an all-night café in Arles, France, that was frequented by derelicts who enjoyed drinking and playing billiards (and Paul Gauguin, who painted the same café). In a letter to his brother, Theo, he wrote:

“In my picture of the Night Café I have tried to express the idea that the café is a place where one can ruin oneself, go mad or commit a crime. So I have tried to express, as it were, the powers of darkness in a low public house, by soft Louis XV green and malachite, contrasting with yellow-green and harsh blue-greens, and all this in an atmosphere like a devil's furnace, of pale sulphur.”

April 15, 2014 in Articles, Estate Administration | Permalink | Comments (0) | TrackBack (0)

Monday, April 14, 2014

Debts to Avoid


Failing to properly budget for retirement can result in a brutal readjustment to a new reality.  One way to avoid a painful readjustment is to keep a lid on debt.  Here are four kinds of debt that can kill your retirement plan:

  • Expensive colleges for your kids.  You may want to avoid saddling your kids with long-term debt, but you won’t be able to borrow in order to fund your healthcare and living expenses in old age.  
  • Credit cards.  Consider long-term, low-risk investment returns instead of easy credit, which can double your debts in four years.  
  • Moving to a better house.  Moving to a smaller house may make sense, but make sure it’s not a retirement-buster.  You may not be able to afford the condo on the golf course.
  • Vacationing.   Wait to go on that round-the-world cruise for at least one year of retirement.  By then you will know more about your actual spending habits. 

See Mitch Tuchman, Debts That Can Kill Your Retirement Plan, Forbes, Apr. 11, 2014.

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

April 14, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Rooney Burial Dispute Resolved


Mickey Rooney will be buried in Hollywood Forever Cemetery alongside other Hollywood legends like Charlie Chaplin, Jayne Mansfield, Rudolph Valentino, and Douglas Fairbanks.

This decision was made by Rooney’s trustee and temporary executor, Michael Augustine, following the resolution of a dispute with Rooney’s estranged wife, Jan Chamberlin Rooney.  Jan had wanted the burial to take place in Westlake, where the couple previously lived.

See Hilary Lewis, Mickey Rooney Burial Dispute Resolved, The Hollywood Reporter, Apr. 11, 2014.

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

April 14, 2014 in Current Affairs, Death Event Planning | Permalink | Comments (0) | TrackBack (0)