Recent Articles in Probate & Estate Planning from LexMonitor

Your Trust and Its Schedule A.

Fri, 21 Nov 2008 20:31:22 GMT

Does your living trust have a Schedule A attached to it? If your answer is No, do not past go and contact your estate planning attorney now to prepare a Schedule A.If your answer is Yes, stop and review the...

Does your living trust have a Schedule A attached to it? If your answer is No, do not past go and contact your estate planning attorney now to prepare a Schedule A.

If your answer is Yes, stop and review the following questions:

1. Is your Schedule A up to date?
2. Does it list all of your assets in your trust?
3. Does it list all of your real estate holdings?
4. Does it list your business interests? Corporations? LLCs? Partnerships?
5. Does it list your promissory notes and IOUs you hold?
6. Does it list all of your bank accounts and brokerage accounts?

If you consider your Schedule A, up to date -- check the titling of all of your assets that you have listed on this Schedule. Do the titles of the assets state that they are held in the Trust? Have you prepared assignments or other transfer documents to put your assets in the Trust?

In California, Schedule A can be evidence that you intended to transfer an asset to your trust and a court order can be obtained effectuating this transfer if you pass away before you had a chance to transfer the asset to your trust. It is called a Heggstad Petition among attorneys (named after a case). It is a useful mechanism to avoid probate in some instances.

There are some assets that should not be titled into your trust. Generally they include retirement accounts and life insurance policies. But even with these kinds of financial products, you need to discuss with your attorney whether in your situation you need to treat your retirement accounts and life insurance policies differently.

Of course, it goes without saying that if you are confused or not sure, consult with your estate planning attorney regarding your living trust and its Schedule A to make sure it is up to date.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given. The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

PBI's 2008 "Estate Law Institute"

neh@goldbergkatzman.com (Neil E. Hendershot) — Fri, 21 Nov 2008 18:59:33 GMT

On December 9 & 10 (Tue & Wed), 2008, the Pennsylvania Bar Institute will present the fifteenth annual "Estate Law Institute" in Philadelphia, PA. Every year, more than 400 of Pennsylvania’s finest estate and trust lawyers who attend the Estate Law Institute find it is the best way to remain informed in the changing world of estates and trust practice. As we move into our 15th year of the Estate

Provide Basic Information for Your Pet Sitter

dannymeek@comcast.net (Danny Meek) — Fri, 21 Nov 2008 18:10:12 GMT

Many of you will be traveling for extended periods in the next few weeks with the holiday season fast approaching.

If you choose not to take your pets with you, the two logical choices for their care are the use of your veterinarian for boarding or a pet sitter.

You probably already have a set routine with your vet. He or she has all of your contact information and emergency numbers as well as a solid full background and history of your pet’s needs and desires.

However, the pet sitter may not readily have this information.

Generally, they will look to you for the specific instructions as for the care and well-being of our pet.

Be sure to provide at a minimum, the following information.

Your Name;

Your email address;

Your cell phone numbers;

Your travel plans and dates;

The name of the hotel or location you are visiting along with all local email, cell phone and facsimile information;

The name and address of your veterinarian;

The business and cell phone of your veterinarian;

Driving instructions to you veterinarian;

The name and number of a local personal contact for emergency purposes, and

An updated power of attorney for that local contact.

The list of necessary information could well include additional items, but at minimum, the above should be left with the sitter.

Valuation of Subchapter C Corporations

GWB@ProfessorBeyer.com (Gerry W. Beyer) — Fri, 21 Nov 2008 16:26:20 GMT

James Roberts (Attorney, Glast, Phillips & Murray, P.C., Dallas, Texas) has written an article entitled Certiorari in Jelke Denied: Simplicity in Valuation . Here is a summary of the article: In the February 2008 edition of eReport, we reported on...

"Aging in America" Recording Available on NAELA Webiste

ghgiddens@trustcounselpa.com (Greg Herman-Giddens) — Fri, 21 Nov 2008 14:46:57 GMT

A recorded version of the National Academy of Elder Law Attorneys (NAELA)'s public webcast "Aging in America: How to Plan for it" is available for through November 30 on the NAELA website. During the one-hour program, AARP and NAELA officials discuss talking with one's parents about aging, family issues in elder care, healthcare decision making, long term care insurance, reverse mortgages and more.

Probate and Trust Litigation Committee - Appellate Rule Project

jantunez@smpalaw.com (Juan Antunez) — Fri, 21 Nov 2008 14:10:13 GMT

Whether certain probate-related orders are or are not subject to appeal is a topic that comes up with some frequency on this blog [click here]. In an effort to add greater certainty to this area of the law, the Probate and Trust Litigation Committee has been working on an appellate rule project. Click here for the latest draft of the proposed appellate rule which is making its way through the appellate rules committee. The current proposal gives probate orders their own separate rule similar to family law orders. If you have any comments to this latest draft, please forward them directly to the sub-committee members working on this important project: Bill Hennessey, Tom Karr, and Sean Kelley.

Financial Assistance for Pet Owners

dannymeek@comcast.net (Danny Meek) — Fri, 21 Nov 2008 14:00:00 GMT

FloridaPets.net is a site that I often visit.

It is a valuable source for animal owners in the State of Florida and has, in general, good information that applies to pet owners and animal lovers in all locations.

Their blog recently posted an idea for generating funds to help animal owners during this particularly difficult financial atmosphere:

"I've been working on an idea for a new Web site that would help people with pets keep their pets during the current financial upheaval. There are simply too many beautiful animals being abandoned - or worse - when people are forced to leave their homes due to foreclosure or the downsizing of their wallets. Granted, there will always be people who welcome any opportunity to dump a dog or cat and being kicked out of their home will be just another great excuse. However, there are many others who love their pet dearly and just need a bit of assistance to stay united with their companion animal.

I put the idea out to my email contacts last month and was heartened to get many replies of encouragement and offers to assist. I've already compiled a fairly good list of resources for low cost vet care, free pet food, medical care assistance, and more, and am tracking down others."

If you want to contribute or assist, contact them directly at WebMistress@FloridaPets.net.

You can visit their website for additional information at http://www.floridapets.net.

B.C. Government Seeking Input on Adult Guardianship Regulations

s.rule@shawlink.ca (Stan Rule) — Fri, 21 Nov 2008 06:30:45 GMT

The British Columbia Minstry of Attorney General is inviting comments on proposed regulations to implement the Adult Guardianship and Planning Statutes Amendment Act, 2007. You can link to the draft regulations, as well as draft Adult Guardianship plans and incapacity planning documents here.

The Adult Guardianship and Planning Statutes Amendment Act, 2007 , will modernize British Columbia's adult guardianship laws, and amends the Power of Attorney Act, and Representation Agreement Act. This legislation was passed by the Legislative Assembly last year, but is not yet in force.

You may send your comments by no later than December 15, 2008 (which is not much time), by email to AGWEBFEEDBACK@gov.bc.ca .

11TH ANNUAL ESTATES AND TRUSTS SUMMIT

Fri, 21 Nov 2008 05:21:30 GMT

The 11^th Annual Estates and Trusts Summit was held in Toronto on November 19 and 20, 2008. This excellent program featured a number of experienced practitioners speaking on a broad array of estates and trusts topics.

Topics (and speakers) included:

Family Law Update (Karon Bales)
Shareholder Issues – The Family Business in Succession Planning (Frank Archibald)
Dealing with Insolvent and Bankrupt Estates (Barry Corbin and Robert Klotz)
The Non-Resident Factor in Estate Planning (Mary Anne Bueschkens and M. Elena Hoffstein)
Update on the Trust and Estate Provisions in the Protocol to the Canada/U.S. Income Tax Treaty (Beth Webel and Jim Yager)
New Strategies for Post-Mortem Tax Planning – The Eligible Dividend Rules and More (Heather Evans)
Powers of Attorney and the Duty to Account – An Update (Liza Sheard)
Powers of Appointment (Timothy Youdan)
The Will is Not the Whole Picture - Integrating the Transfer of Wealth both Inside and Outside the Estate (Wendy Templeton)
New Developments in Insurance and Estate Planning (Graham Carter)
Update on Practice Directions for the Estates List (The Honourable Mr. Justice David M. Brown)
Capacity and Other Issues in Power of Attorney and Guardianship Disputes (Jan Goddard)
A Clinician’s Perspective on Assessing Testamentary Capacity and Related Capacities (Dr. Kenneth Shulman)
Capacity Issues – The Perspective of the Hospital, Retirement Home and Group Home (Wendy Griesdorf)
The Vulnerability of Pre-Death Gifts (Eric Hoffstein)
The Scope of the Attorney’s Powers (Sender Tator)
The Incapable Minor Turning 18 (Clare Burns)
Remarks from the New Children’s Lawyer for the Province of Ontario (Debra Stephens)
Marshalling the Evidence For and Against Capacity in a Will Challenge (Hilary Laidlaw)
Short Circuiting the Frivolous Will Challenge (Hull and Hull’s Craig Vander Zee)
Mediation of Capacity Issues – The Mediator’s Perspective (Felice Kirsh and Archie Rabinowitz)

If you were not able to attend, the seminar materials will be available from the Law Society of Upper Canada.

Thank you for reading,

Paul Trudelle

Coach Broyles' "Alzheimer's Playbook"

neh@goldbergkatzman.com (Neil E. Hendershot) — Fri, 21 Nov 2008 00:12:23 GMT

In recognition of November, 2008 as National Caregivers Month, a number of new books were issued on the topic of caregiving, that join books regularly revised & updated, some posted online for free. The foundational, classic book on the subject of personal caregiving is The 36-Hour Day (4th Ed., 2006), subtitled A Family Guide to Caring for Persons with Alzheimer Disease, Related Dementing

"Dear Abby" Answers Alzheimer's Caregiver

neh@goldbergkatzman.com (Neil E. Hendershot) — Fri, 21 Nov 2008 00:08:21 GMT

On November 9, 2008, the personal advice column "Dear Abby" highlighted a question from a caregiver for a parent afflicted with progressive Alzheimer's Disease, which ended with the plea: "I can’t keep my head above water. Please tell me what to do." November, 2008 is National Caregivers Month, according to the White House Proclamation for National Family Caregivers Month, 2008, issued October,

Copyrights and Estates

GWB@ProfessorBeyer.com (Gerry W. Beyer) — Thu, 20 Nov 2008 22:19:01 GMT

Rebecca F. Ganz (J.D. Candidate, May 2009, Loyola Law School, Los Angeles) recently authored an article entitled Portrait of the Artist’s Estate as a Copyright Problem, 41 Loy. L.A. L. Rev. 739 (2008). Here is an excerpt from the article's...

Virtual Representation Analyzed

GWB@ProfessorBeyer.com (Gerry W. Beyer) — Thu, 20 Nov 2008 22:11:50 GMT

Martin D. Begleiter (Ellis and Nelle Levitt Distinguished Professor of Law, Drake University Law School) recently authored an article entitled Serve the Cheerleader--Serve the World: An Analysis of Representation in Estate and Trust Proceedings and Under the Uniform Trust Code...

IRS private letter ruling documents creative lawyering by Florida probate litigators

jantunez@smpalaw.com (Juan Antunez) — Thu, 20 Nov 2008 17:58:27 GMT

Veteran Florida probate litigator Amy Beller was kind enough to direct me to Private Letter Ruling 200844010, in which the IRS ruled that if you split a single marital trust into five separate sub-trusts and then terminate just one of those sub-trusts, IRC § 2519 would be triggered only with respect to the terminated sub-trust. The significance of this PLR is that it provides an excellent summary of the transfer-tax consequences you need to both anticipate and deal with any time you terminate a marital trust that's been QTIP'd, while also explaining how to manage those tax issues by elegantly leveraging the flexibility built into Florida's new Trust Code.

Here's a key excerpt from the linked-to PLR:

In the present case, Spouse has a qualifying income interest for life in Marital Trust, and Child 1, Child 2, Child 3, Child 4, and Child 5 are the presumptive remainder beneficiaries. Pursuant to Settlement Agreement, Marital Trust will be divided into five trusts: specifically, four Surviving Settlement Trusts and Child 1’s Settlement Trust. Under State Statute 1, each of the five trusts will be treated as a separate trust for all purposes from the date on which the severance is effective. After the division, Spouse will have a qualifying income interest for life, and Child 2, Child 3, Child 4, and Child 5 will be the remaindermen of the Surviving Settlement Trusts. Child 1’s Settlement Trust will be terminated. Accordingly, based on the facts submitted and representations made, we conclude that the division of Marital Trust into five trusts and the subsequent termination of Child 1’s Settlement Trust pursuant to Settlement Agreement will not be deemed to be a transfer under § 2519 of any property interest, or interest in, the Surviving Settlement Trusts, and therefore, such division and termination will not give rise to any gift tax liability with respect to any property of, or interest in, any of the Surviving Settlement Trusts.

Amy represented the surviving spouse/income beneficiary of the marital trust, so she deserves a good amount of the credit for this PLR. By the way, South Florida tax lawyer Charles Rubin also wrote about this PLR here on his blog Rubin on Tax.

Deductibility of Estate Planning Legal Fees

ghgiddens@trustcounselpa.com (Greg Herman-Giddens) — Thu, 20 Nov 2008 17:49:40 GMT

Contrary to what many of my clients assume, legal fees for general estate planning are not deductible for income tax purposes. Estate planning fees are only deductible to the extent that they represent income, gift, or estate tax planning or advice. Wong, Tax Court Memo 1989-683.

For a relatively sophisticated plan invovling credit-shelter and marital trusts, the deductible portion of the fee may be about 50% at most. The deduction is a miscellaneous itemized deduction, meaning it is subject to the two percent (of adjusted gross income) floor. IRC Section 67.

The effect of the 2% floor is that most people who pay for tax planning, who are generally high-income, do not get the benefit of the deduction.

Legal fees for business-related legal advice and services are deductible by the business. However, It is not proper to for a self-employed person to pay for their personal estate planning out of his or her business in order to get a deduction.

In any event, make sure you talk to your estate attorney and CPA to ensure that any deduction you take is lawful.

Guaranty Title & Trust Company bids Adieu

Thu, 20 Nov 2008 17:31:58 GMT

Title Insurance companies are licensed and regulated by each state the they are authorized to transact business in. In Illinois, that duty falls to the Department of Financial & Professional Regulation. On November 7, IDFPR announced the death of one of those companies, Guaranty Title & Trust Company.

Inquiries regarding the GTT liquidation and requests for Proofs of Claim forms should be directed to: The Office of the Ohio Insurance Liquidator, Attn: GTT, 50 W. Town Street, Third Floor, Suite 350, Columbus, OH 43215. The telephone for that office is (614) 487-9200.

SHOULD CONSUMERS TAKE ACTION? Well, that is going to depend on where you closed or who insures your title.

If your title insurance comes from Chicago Title, Ticor Title, First American, Stewart or LandAmerica, or Old Republic (which collectively control roughly 93% of the title insurance markets) you probably don't have any worries. Guaranty was not one of the "big five." Same goes for titles written by Attorneys Title Guaranty, Professional National Title, and as near as I can figure, Greater Illinois, Prairie, Mercury title too.

But if your title came from any other company, you might want to pull out that closing file and check to see if the title insurance underwriter was GTT. If so, pick up the phone and call your lawyer to get make sure you retain some insurance protection.

Title Insurance Company Woes Continue

Thu, 20 Nov 2008 17:14:43 GMT

Most Chicago area home closings take place at a title insurance company's office. Just setting foot into those offices these days tells you all you need to know about the current state of the Real Estate business: Still open, ready and willing to do business, but it's just not happening. Most are pretty lonely places right now.

The numbers seem to bear this out. According to the American Land Title Association and Inman News, All five of the nation's five biggest title insurers lost money during the third quarter.

Those grisly numbers:

First American, the nation's largest, reported an $8.3 million third-quarter loss
Fidelity, number two in 2007, lost $198 million and closed 115 title and escrow offices
Stewart reported $30 million in losses, closed 40 branches, and canceled 1,750 independent agencies
LandAmerica lost $599.6 million! which may explain its recent announcement that it was being acquired by Fidelity, and the urgent need for an immediate $30 million in secured credit to keep them liquid).
Old Republic was $48 million in the red.

More than 18,000 industry jobs have been eliminated since the market dowturn began.

So what does this mean for consumers?

Well, on the down side, expect title insurance premiums and closing costs to go up. Fidelity for one is reportedly planning 10-20% price increases nationwide. Underwriting standards are going to be tightened down even tighter. Its going to get harder to "work-around" unresolved title issues. I would not be surprised to see more title companies close down and consolidate operations in their suburban and neighborhood offices. This process has already begun. Smaller title agencies are also likely to start shutting down operations as well.

On the bright side, its going to be pretty easy to schedule closings, and when you do get the deal to the table, everyone is going to be real happy to see you there .

Should an "accessions" tax replace the estate tax?

GWB@ProfessorBeyer.com (Gerry W. Beyer) — Thu, 20 Nov 2008 13:47:40 GMT

Joseph Dodge (Stearns Weaver Miller Weissler Alhadeff & Sitterson Professor, Florida State University College of Law) has recently posted on SSRN his article entitled Replacing the Estate Tax with a Re-Imagined Accessions Tax. Here is an abstract of the article:...

Recent Texas cases analyzed

GWB@ProfessorBeyer.com (Gerry W. Beyer) — Thu, 20 Nov 2008 13:33:48 GMT

Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law, Texas Tech University School of Law) has recently published his article entitled Wills and Trusts, 61 SMU L. Rev. 1179 (2008). Here is the introduction to his article: This...

Wrongful Death vs. Survival Actions

patti@spencerlawfirm.com (Patti Spencer) — Thu, 20 Nov 2008 07:55:59 GMT

The general rule is that damages for a decedent's pain and suffering (the survival action) are an asset of the decedent's estate and subject to federal estate tax and PA inheritance tax. The wrongful death award that goes to next of kin for loss of society, consortium and support are not estate assets and are not subject to estate or inheritance tax.

Trusts & Estates carried an article by John T. Brooks and Samantha Weissbltuh, entitled Estate Tax on Wrongful Death Claims? which discusses an Illinois case where the appellate court held that the wrongful death damages went to the estate. The case, Bender v. Eiring, 2008 WL 351126 (Ill. App. 1st Dist. Feb. 7, 2008) established, in the words of the authors. "a potentially dangerous precedent."

Brooks and Weissbluth say: "We not only think the appellate court made a mistake, but also worry that the decision could have an unfortunate ripple effect. Will wrongful death proceeds now be subject to estate tax? Spousal elections? Creditors' claims?"