Tuesday, May 6, 2014

treasuremapYears ago, my grandparents were robbed.  While going through the house and noting the missing items, my grandmother told my mother she was grateful they did not find the family silverware hidden in the attic staircase.  This was the first time my mother had heard of the hiding place and told my grandmother, “I would have sold this house having never found the silverware.”

Nearly everyone has a hiding place for a few special, tangible items, and increasingly many individuals have assets that are not easy to identify or locate.  After the death of the owner of such assets, it can be very difficult for the personal representative of the estate to locate and take possession of all of the decedent’s assets. (more…)

Monday, February 24, 2014

Originally posted on bryancavefiduciarylitigation.com

When it comes to will execution, sometimes the belt and suspenders approach may be well advised.  But, other times, less is more.  Like, perhaps, when it comes to the number of witnesses.  When state law requires that you only need a set number of witnesses to a will, the Court of Appeals of Tennessee’s opinion in the will contest case of Estate of Woolverton shows us the potential problems that may arise when you bring in extra, unnecessary witnesses.

In Tennessee, the execution of a will requires only two witnesses.  Three witnesses, however, signed the will of Dennis R. Woolverton.  At a hearing on the will contest, only two of the three witnesses and a notary public testified about the signatures on the purported will.  The trial court held that the document was the decedent’s validly executed will and admitted it to probate. (more…)

Monday, February 10, 2014

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Recent news stories such as that of Marlise Muñoz in Texas and auto racing star Michael Schumacher serve as a reminder of the importance of discussing your wishes with others regarding end-of-life care. Select someone you trust to make those decisions on your behalf in case you become incapacitated, and sign the documents required to empower that person to act for you if necessary.

Most Americans say they want to die at home, surrounded by family and friends. But data from Medicare shows only about a third of elderly patients die this way. Taking a few small steps now can go a long way toward ensuring that your wishes are respected when the time comes.

You can start by talking to your family, your friends, and your doctors about your wishes in terms of death-delaying care in the event you are unable to make those decisions for yourself. Do you want “extraordinary” measures taken to prolong your life, such as major surgery or a mechanical respirator? What about artificial nutrition and hydration? Under what conditions? Is the cost of procedures to be taken into consideration? Do you wish to remain at home rather than be transferred to a hospital or nursing facility? Do you want to be an organ donor? Do you want to be buried or cremated? For help getting the conversation started, visit deathoverdinner.org. The website was launched last year for precisely this purpose. It provides invitation language, reading materials, conversation prompts, and hosting tips, among other things.

After you’ve shared your wishes with others, it’s important to select the person (or persons) you would like to have act on your behalf, if necessary. Typically referred to as an “agent,” a “health care surrogate,” or an “attorney-in-fact for health care decisions,” this person is authorized under an advance directive or a healthcare power of attorney to communicate with your physicians and make medical decisions for you if you are incapacitated. This should be someone you trust and who knows your wishes regarding medical treatment and end-of-life care and will be able to make decisions for you in accordance with those wishes. Typically you would designate only one person at a time to serve as your attorney-in-fact for health care decisions. However, you may be able to designate multiple individuals as your attorneys-in-fact for health care decisions. If more than one person is designated – my three children acting jointly, for example – consider whether any one or more of the persons designated may act alone, or if you want decisions made by majority rule. And be sure to appoint one or more successor attorney(s)-in-fact for health care decisions, to serve if your first choice is unable or unwilling to serve.

Put it in writing. According to the New York Times, only about 47% of Americans over age 40 have advance directives or living wills. State law governs what you will need in order to authorize another person to make medical decisions for you. Depending on your state, you may need what’s called an advance directive, a living will, and/or a healthcare power of attorney. A good resource for state forms and other information related to end-of-life issues is caringinfo.org. For questions regarding how to complete forms, you should consult your attorney.
Revisit and update your documents periodically. Have your wishes regarding medical treatment or end-of-life issues changed? Are the people you designated as your attorneys-in-fact and successors still aware of your wishes and able to act on your behalf? Have you moved to a new state? State requirements differ, so it’s important to sign documents that conform to your new home state’s specifications when you move.

Not surprisingly, doctors are more likely than the rest of us to have advance directives. This is one easy lesson in medicine that doesn’t require an M.D.

Friday, January 31, 2014

Under the portability rules a surviving spouse can elect to have the deceased spouse’s unused estate tax exemption (currently $5.34 Million) added to the surviving spouse’s estate tax exemption amount. But to do this, a federal estate tax return has to be filed within 9 months of the death of the first spouse, even if there is no taxable estate for estate tax purposes. The federal estate tax return is the only way to take advantage of the portability election.  The nine month time limit has proved to be an issue in regards to same-sex spouses, whose marriages were not recognized by the IRS until the Windsor decision on June 26, 2013.  Click here, here, and here to read about the Windsor decision. We believed the Windsor decision may have opened the door to the otherwise “late” portability elections for same-sex spouses, but were not sure how the IRS would treat an otherwise late return for this purpose.

Good News! Now, for deaths of same-sex couples that occurred in 2010, 2011, and 2012, Rev. Proc. 2014-18 provides a process for claiming portability for any spouse, same sex or not, who died between December 31, 2010 and December 31, 2013, even if otherwise a “late” election. (more…)

Tuesday, January 28, 2014

Yesterday, the IRS released Rev. Proc. 2014-18, which provides a simplified method for certain taxpayers to obtain an extension of time to make a “portability” election, allowing a surviving spouse to apply a deceased spouse’s unused exclusion amount (deceased spousal unused exclusion amount, or DSUE amount)  to the surviving spouse’s subsequent transfers during life or at death.  For more discussions on portability, see our prior posts herehere, here, here and here (can you tell portability has been a hot topic in recent years?)

Under section 2010 (c)(5)(A) of the Code, a portability election must be made on a timely filed Form 706 (Estate Tax Return).  If an executor would not otherwise be required to file an Estate Tax Return, the executor may file for an extension of time under section 301.9100-3 to make the portability election.  In general, such an extension will be granted if the taxpayer establishes that the taxpayer “acted reasonably and in good faith and that the grant of relief will not prejudice the interests of the government.”  In Revenue Procedure 2014-18, the Service sets forth a simplified method to obtain such an extension, if certain requirements are met. (more…)

Friday, January 24, 2014

Recently, a man who died in Tennessee left his two cats a life interest in his estate. Upon the death of the surviving cat, the remaining estate will pass to the man’s family. Comments on the internet have focused on the cats’ safety, which reminds me of the old Disney move, The Aristocats, where a wealthy old lady leaves her estate to her cats for their lives and the remainder to her butler. After the will is drawn up, the butler tries to dispose of the cats, so he will inherit the estate immediately upon the lady’s death. When her cats expose the butler’s plan, with the aid of several other animals, the lady writes him out of her will and adds the animals that helped save her cats into her will.  You can read more about the Tennessee Aristocats here.

Leaving one’s entire estate to the pets is somewhat extreme. However, most people want their pets cared for after their death. For many reasons, it is important to make such arrangements in your estate planning documents for your current pets and any future pets.

Most people consider their pets members of the family, but under the law, pets are property. Pets are, of course, a special kind of property that require you to make decisions regarding their care and the funding for such care. Thus, you must decide who is best suited and qualified to care for your pets, what amount of money will be needed to care for your pets, and how you want to leave your pets and any money for their care, outright or in trust. (more…)

Wednesday, November 27, 2013

Originally posted on bryancavefiduciarylitigation.com

Testators may want to keep careful track of who has copies of their will and where those copies are.  If only a copy of a will – and not the original – is found, it may raise a question about whether the testator destroyed the original in an attempt to revoke it.  Such was the argument made by the caveators in Johnson v. Fitzgerald.  Let’s see why the Georgia Supreme Court felt like a copy was good enough to admit to probate in solemn form.

The executor of an estate offered a copy of a will for probate in solemn form, requesting that it be admitted to probate upon proper proof.  The original could not be found.  The testator’s heirs at law filed a caveat alleging that the will had been revoked by the testator’s destruction of it.

Under Georgia law, if the original of a will cannot be found for probate, there is a presumption that the testator intended to revoke the will.  But this presumption can be overcome if a copy is established by a preponderance of the evidence to be a true copy of the original and if it is established by a preponderance of the evidence that the testator did not intend to revoke the will.  Here, there was “ample evidence” that the testator intended for provisions in his will to continue in force.

Under the propounded will, $50,000 was bequeathed to a church for the use of its cemetery fund, $50,000 was bequeathed to an individual, and the will named a trust which benefited a foundation as the residuary beneficiary.  The Georgia Supreme Court highlighted the following evidence that supported a conclusion that the testator did not intend to revoke the will:

– The testator executed a document guiding the trust referenced in the will, and he later amended the trust;

– In discussions with his attorney about the trust amendment, the testator understood that his assets had grown to a point that the church named as the primary beneficiary of the trust might not have need for the full amount, and he wanted to give the trustees of the trust the flexibility to fund charitable contributions from the money that would pour over from the estate to the trust;

– The testator told the pastor of the church that he was leaving money for the cemetery fund in his will;

– The testator expressed disdain for what he considered his relatives’ greed, stating that he did not wish for them to have his money; and

– Prior wills were consistent with the propounded will insofar as they left money for the cemetery fund and excluded the caveators.

Friday, November 1, 2013

Originally posted on bryancavefiduciarylitigation.com

Individual trustees who must administer real property often attempt to save the trust money by personally making certain improvements, repairs, or maintenance to the property.  They then charge the trust for the work they performed.  As the Nebraska Court of Appeals points out in In re Estate of Robb, however, these acts – however well-intentioned – may be self-dealing and can put the trustee in a position of a conflict of interest, which can warrant removal from that fiduciary position.

When Mason D. Robb died, his son, Theodore, became the personal representative of his estate and the trustee of the inter vivos Mason D. Robb Revocable Living Trust.  The trust contained three pieces of real estate.

Under the terms of the trust, the trustee was to hold and use the trust property to pay administrative costs and the debts of the settlor and for the benefit of the Mason D. Robb QTIP Family Trust.  The trust directed the trustee to separate the funds in the family trust into two equal shares: one for Theodore’s benefit and one for the benefit of his sister, Linda.  Theodore’s share was to be delivered to him outright while Linda’s share was to be held in trust.  Linda was also entitled to income distributions from her share of the family trust. (more…)

Wednesday, July 10, 2013

Gandolfini

The terms of James Gandolfini’s December 2012 Last Will and Testament were made public last week when it was filed in New York County Surrogate’s Court. There are a series of specific bequests to his teenage son by his first marriage and some friends and relatives, but the bulk of his probate assets is disposed of as his “residuary estate” and is divided among his sisters, his wife and his baby daughter.

The tax clause of his Will directs that all estate taxes are to be paid from his residuary estate. What does that mean to his beneficiaries? And what does that mean to the IRS and to the NYS Department of Taxation and Finance? Only the 20% of the estate that passes to James Gandolfini’s widow will qualify for the Federal and NYS estate tax marital deduction. (For a more detailed discussion of the federal marital deduction, see our prior post in anticipation of a ruling in the recently decided Windsor case, Will SCOTUS Eviscerate DOMA? What Effects Could That Have on Tax Planning?)  As a result, his estate could be subject to taxes at a combined rate of about 50% over his unused lifetime exemption, which is $1M for NYS and $5.25M for the IRS.

It is rumored that Mr. Gandolfini’s estate is worth approximately $70M. The total estate tax due is likely be over $25M and will be due a mere nine months after Mr. Gandolfini’s untimely death. In all likelihood, assets will need to be sold to generate liquidity to meet this estate tax bill. (more…)

Monday, July 8, 2013
 
 

ACA Compliance Group
St. Louis Skyline

ACA Compliance Group, Bryan Cave, ExamFX and Global Relay Present 
St. Louis Compliance Workshop for Broker-Dealers and Investment Advisers – July 24, 2013

Wednesday
July 24, 2013

1:00 p.m. – 4:00 p.m.
Cocktail Reception
Immediately Following

Location:
Bryan Cave
One Metropolitan Square
211 N. Broadway
St. Louis, MO 63102-2750

RSVP
By July 17, 2013


ACA may provide information about roundtable attendees (name, company name, provided address, phone, and email information) to our event co-sponsors. However, you may opt out of this information sharing if you prefer (see instructions following registration).

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Register NOW for a complimentary workshop designed to assist broker-dealer and investment adviser compliance professionals in dealing with current tough regulatory challenges. Our industry-knowledgeable speakers and panelists from Global Relay, ExamFX, Bryan Cave, ACA and the industry will discuss topics relevant to regulatory requirements.

Meeting Agenda

Registration 1:00 p.m.
Broker-Dealer Session 1:30 p.m.
Investment Adviser Session 2:20 p.m.
Regulatory Exams and Hot Topics 3:10 p.m.
Cocktail Reception 4:00 p.m.

CLE credit has been applied for in Missouri.

If you would like to ask a question anonymously, please submit it prior to the meeting. We will respond to it during the roundtable.

Please contact Dee Stafford at dstafford@acacompliancegroup.comwith any questions.

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