Wednesday, October 7, 2015

Because powers of attorney are often used as an elder care planning tool, they are also often used by the attorney-in-fact to manage the estate planning and finances of the principal.  The creation of a trust can be an important estate planning tool, so, if the principal wants to authorize his or her agent to create a trust, that authorization should be specifically granted in the power of attorney.  Not surprisingly, there is increasing litigation over the scope of powerconveyed to an agent through a power of attorney, including litigation regarding the agent’s authority to create a trust for the principal.  In Dishman v. Dougherty, Kentucky was one of the latest states to have an appellate court weigh in.

Setting aside a very complex factual and procedural history that are recounted in detail in the opinion, one of the take-aways from the opinion was that this paragraph in a power of attorney did not authorize the attorney-in-fact to create a trust (particularly when considered in conjunction with the terms of an antenuptial agreement between the husband/principal and the wife/co-trustee/attorney-in-fact):

[Granting the power to] [c]onvey any real or personal property to the Trustee of any trust agreement between me and said Trustee and entered into either before or after the date of this instrument . . .

The appellate court held that “in order for an attorney-in-fact to create a trust pursuant to a POA, this authority must be expressly provided for in the instrument if it contains a specific provision related to trusts.”  Here, the power of attorney only permitted the attorney-in-fact toconvey property into a trust rather than permitting the power to create a trust.  As a result, a trust purportedly created by the attorney-in-fact was void ab initio.

Estate planners and prospective principals should consider discussing the power to create a trust as one of the specific powers granted to an attorney-in-fact.  In addition, trustees accepting a trust purportedly created using a power of attorney should consider, as part of their due diligence in accepting the relationship, a thorough analysis of whether the the power of attorney actually permitted the creation of the trust.

Monday, October 5, 2015


Uniform Transfers to Minors Act

Florida’s Uniform Transfers to Minors Act (“UTMA”), found under Florida Statutes Chapter 710, provides a mechanism for the creation of custodial accounts for gifts, bequests or other transfers to minors, without requiring the presence of an appointed guardian for the minor. Previously, under Florida’s UTMA, minors were defined as persons under the age of 21.
The new UTMA statute, effective July 1, 2015, permits custodianships to last until the age of 25. A custodianship under Florida law can be created if the transferor, the custodian or the minor resides in Florida or if the custodial property is situated in Florida.

Health Care Surrogates

A designation of a Health Care Surrogate is a written document appointing someone to make health care decisions for an individual (the “Principal”) or receive health information on such person’s behalf in the event he or she is unable to do so. Florida’s new health care surrogacy act, found under Florida Statutes Section 765.201 through Section 765.205, allows for more flexibility in appointments of surrogates and more flexibility in drafting of such documents.

The new act, effective October 1, 2015, allows the continuation of presently-exercisable designations of health care surrogates, also known as “durable” health care surrogates. A durable health care surrogate is one who can make health care decisions even if the Principal is not determined to be incapacitated. However, if the Principal has capacity, the statute indicates that the Principal’s decisions are controlling. Nonetheless, a Principal still may create an old-fashioned health care surrogate document that only takes effective upon a finding of incapacity.

The new act also allows parents and guardians to name health care surrogates for their minor children. This is extremely effective for parents who travel often or are unable to provide informed consent themselves. These changes do not invalidate existing Florida designations of health care surrogate documents.

Monday, September 21, 2015

The 7520 rate for October has decreased to 2.0%.

The October 2015 Applicable Federal Interest Rates can be found here.

Thursday, September 17, 2015

ThinkstockPhotos-482577350Thomson Reuters Checkpoint has calculated the projected inflation-adjusted amounts for several transfer tax figures for 2016. These calculations are based on the average Consumer Price Index (CPI) for the 12-month period ending on August 31, 2015. Please note that these are the projected inflation-adjustments and not the official figures from the IRS which will be released later in the year.

The following relevant items are included within this report:

• The “unified credit” or lifetime gift tax and estate tax exemptions are projected to increase from $5,430,000 in 2015 to $5,450,000 in 2016.

• The generation-skipping transfer tax exemption is also projected to increase from $5,430,000 in 2015 to $5,450,000 in 2016.

• The gift tax annual exclusion is not projected to increase; it is projected to remain $14,000 in 2016.

• The gift tax annual exclusion for gifts to non-citizen spouses is projected to increase from $147,000 in 2015 to $148,000 in 2016.

Additional information on these and other projected tax related inflation-adjusted figures for 2016 can be found in the following report: 2016 Inflation-Adjusted Figures Report.

Friday, September 11, 2015

ThinkstockPhotos-80614811Are you getting ready to write that big check to the IRS?  If so, you should be aware that the IRS is no longer accepting checks in amounts larger than $99,999,999.00.  In Internal Revenue Bulletin 2015-36, the IRS announced that, starting on January 1, 2016, the IRS will begin returning checks in amounts greater than $99,999,999.00 to the originator.  If you are one of the unlucky few who owe this much in tax (I might disagree and say you’re lucky to owe that much because how much do you have left after paying $100 million in tax?) you should be aware that you will have to send the IRS more than one check to make your payment.

Friday, September 4, 2015

When: Thursday, Oct. 22, 2015, from 9 a.m. to 5 p.m.
Where: Social Sciences and Business Building — SSB # 411 on the UM-St. Louis North Campus
Fee: $89 (includes lunch)

Program Description: 
Starting a 501(c)(3) nonprofit organization and governing a 501(c)(3) nonprofit organization are flip sides of the same coin.  Steps you take in forming a 501(c)(3) nonprofit corporation affect how your organization must operate in the future. Steps you take in the governance and operation of your 501(c)(3) nonprofit corporation affect your ability to maintain your 501(c)(3) tax-exempt status with the IRS on an ongoing basis.

Come to this class to learn how to start a Missouri nonprofit corporation that will seek to obtain 501(c)(3) tax exempt status from the IRS. In addition, this class will also cover good governance policies, strategies, and requirements that will allow your organization to maintain its 501(c)(3) tax exempt status on an ongoing basis once you are up and running.

This is an intensive 8-hour class that will focus on practical information and resources like forms to use, websites to access, governmental offices to contact or be aware of, and a checklist of steps to take.

Instructor Dan Sise, JD, joined the Nonprofit Management and Leadership Program (NPML Program) at U.M. – St. Louis in October, 2008, and serves as the NPML Program’s Academic Coordinator and Community Engagement Manager. A 1997 graduate of the University of Illinois College of Law, Dan is currently licensed to practice law in Missouri and Illinois. In the course of his legal career, Dan has dealt with a wide range of issues, including regulatory compliance, insurance coverage and defense, community redevelopment, and nonprofit governance and oversight. He serves on the board of directors of a number of nonprofit organizations, including the St. Louis-Jefferson Solid Waste Management District and Mission: St. Louis. Prior to joining the faculty of the NPML program, Dan worked at Habitat for Humanity St. Louis where he was director of operations.

To register, click here.

Monday, August 31, 2015


Last month, the UK government announced sweeping changes to the taxation of “resident non doms,” a classification of individuals who receive favorable tax treatment from the UK government.

The UK tax obligations of an individual depend in large part on the individual’s “domicile” under generally applicable English common law principles. (Unlike the US tax system, the citizenship of an individual is irrelevant under the UK tax system.) The UK income tax and capital gains tax systems (which operate as two separate regimes of tax) take into account the “residence” status of an individual, as well. The residence rules were massively overhauled with effect from 6th April 2013. Note that a UK tax year runs from April 6 to April 5 of the following years.

Because of quirks in the English common law approach to determining domicile, in extreme cases it is possible for several generations of a family whose patriarch was domiciled at birth outside of the United Kingdom to live in the United Kingdom without becoming UK domiciled. As a result, these “non-doms” enjoy certain UK income and capital gains tax advantages, which various political parties in the United Kingdom have threatened for years to restrict or eliminate altogether. (more…)

Tuesday, August 25, 2015

The 7520 rate for September has remained at 2.2%.

The September 2015 Applicable Federal Interest Rates can be found here.

Friday, August 21, 2015

ThinkstockPhotos-186176261As part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed into law by President Obama on July 31, 2015, Sections 1014(f) and 6035 were enacted.

Section 1014(f) provides rules requiring that the basis of certain property acquired from a decedent may not exceed the basis of that property as finally determined for federal estate tax purposes, or, if not finally determined, as reported on a statement made under section 6035.

Section 6035 imposes new reporting requirements  for the executor of an estate of a decedent where a federal estate tax return is required to be filed.  The executor must furnish, to both the IRS and to each person who holds a legal or beneficial interest in the property listed on the estate tax return,  a statement “identifying the value of each interest in such property  as reported on such return and such other information with respect to such interest as the Secretary may prescribe.”

Section 6035 requires that such statements must be furnished no later than the earlier of (1) the date which is 30 days after the date on which the federal estate tax return was required to be filed (including extensions, if any) or (2) the date which is 30 days after the date such return is filed.

The Internal Revenue Service today released Notice 2015-57, which delays the due date for filing that statement until February 29, 2016, giving the Treasury Department and the IRS time to prepare the necessary guidance implementing the new reporting requirements.

Thursday, August 20, 2015


Congratulations to Kathy Sherby for being named “Lawyer of the Year”  2016 by Best Lawyers®, the oldest lawyer-rating publication in the U.S!

Best Lawyers names a single lawyer in each specialty in each community as “Lawyer of the Year.” Kathy was named in the Trusts & Estates specialty group. Those honored have received particularly outstanding ratings in the surveys by earning a high level of respect among their peers for their abilities, professionalism and integrity.