The Instructions for Form 706 released in November 2018
included new addresses; however, we felt a reminder could be useful since the
filing address changed mid-year. Effective
for United States Estate (and Generation-Skipping Transfer) Tax Returns (Form
706) filed after June 30, 2019,
Form 706’s should no longer be sent to the Cincinnati campus for filing, but
should instead be sent to:
Department of the Treasury Internal Revenue Service Kansas City, MO 64999
In the past week, our firm has had several clients receive
in the mail, and fortunately ask us about, a form titled “2019 – Period Report
Instruction Form (Colorado LLCs)”. This
form purports to advise the client that the annual report or renewal for their
entity is now due; however, the form is not from the Colorado Secretary of
State but is instead from a non-related company. The form does list the specific entity name
and address information and looks deceptively official; however, it also
specifically states “… is not a government agency and does not have a contract
with any governmental agency to provide this service.”
As a probate paralegal, I spend a decent amount of time helping families transfer assets and completing forms. One of the more common questions that I get is “What does one need to do and take to the DMV to transfer a vehicle title to the beneficiary?” I typically go through the steps and let the client know all of the information they should have handy; however recently I discovered an awesome checklist from the Denver DMV. While they state that this is specific to Denver County and you should check with the specific county, this is a really good starting point for all Colorado titles. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-12-03 10:49:322018-12-03 10:49:32Inheriting Vehicles – Sample Checklist Before You Go to the DMV
No-contest clauses (sometimes called in terrorem clauses) are extremely common in today’s litigious society. A no-contest clause essentially makes all gifts under the will or trust conditional upon not challenging the document. Many clients are concerned about a beneficiary (or a disinherited heir) contesting their estate planning documents, especially if the client wants to hold a beneficiary’s assets in trust or restrict or cut off a potential beneficiary’s idea of what they might inherit. In my practice, clients are asking for them much more frequently than when I first began doing estate planning in 1990. This is particularly true with blended families where there may be a greater potential for disagreement among the various beneficiaries or between those who are favored by the plan and those who feel they were wronged by the dispositive terms. Trust and estate litigation is frequently driven by emotion, and many times the beneficiary’s complaints are not rational, thereby leading to protracted litigation and waste of the trust or estate’s assets. This is what the settlor is typically trying to avoid by the use of a co-contest clause. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-09-12 10:38:212018-09-12 10:38:21No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception
The Holland & Hart Trust and Estate Litigation Group announces a big litigation victory. After a three-day trial, ruling from the bench, the court upheld our trustee client’s interpretation of a trust in defeating a claim that there was a contract to make a trust. In addition, we were able to enforce a no contest clause against the beneficiary bringing the claim and prevailed in enforcing a fee-shifting provision contained in the document. Congratulations to our team of litigators and our Persuasion Strategies consultant who combined to bring home this victory!
A mother visits her attorney to discuss her estate plan. She expects that the conversations she has with her attorney will be forever confidential and privileged, particularly when she wishes to guard uncomfortable realities from her family members, such as her desire to disinherit her son. Upon the mother’s death, her disinherited son figures out that he is in fact removed from her estate plan. Here we have the classic scenario in which a snubbed child wants to challenge the provisions in the estate plan to prove that the decedent did not intentionally fail to provide for him. But with the mother now deceased, how do we determine her actual intent?
The mother’s estate planning attorney is in the next best position to ascertain her intent, but doesn’t the attorney’s duty of confidentiality to the mother prevent him from disclosing any information he may have regarding her intent, specifically when the mother thought she was speaking in confidence? Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-08-15 14:39:122018-08-15 14:39:12Your Secret’s Safe with Your Estate Planning Attorney, Or Is It?
It is very difficult for a trustee to have conflicts of interest without breaching the duty of loyalty. We typically think of trustee conflicts as they relate to self-dealing by the trustee, which is almost always a problem and for which the beneficiaries can obtain redress. But I have seen more conflicts lately in my practice where a trustee is trustee of different trusts that have conflicting interests, or the trustee is serving as trustee of a trust and also as personal representative of an estate whose interests are in direct conflict with each other.
When faced with a conflict situation, a trustee needs to take action before he or she breaches the duty of loyalty, which is a bedrock duty owed by all fiduciaries. Restatement of Trusts § 78 (1) states that a “trustee has a duty to administer the trust solely in the interest of the beneficiaries . . . .” That is not possible when the two trusts (or the trust and the estate) have conflicting interests and what the fiduciary does as trustee of one trust would be detrimental to the other. One example would be engaging in a specific transaction that is beneficial to the beneficiaries of one trust but harmful to the beneficiaries of the other trust or of the estate. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-07-16 09:59:412018-07-16 09:59:41Avoiding Fiduciary Conflicts of Interest
Fiduciary litigation continues to grow and often times outpaces the development of case law regarding the myriad of issues that arise in estate and trust disputes. Historically fiduciary litigation involved disputing family members or changes in family circumstances. However, another frequent source of litigation is the estate planning documents themselves. For this reason, estate planners often include a no contest clause, or in terrorem clause, in a will or trust as a means of deterring feuding beneficiaries from challenging the validity of the instrument; yet, enforcement of these no contest clauses carries its own burden.
A no contest clause is more frequently contained in a will, although it can also be prudent to include these provisions in trusts – especially when the underlying concern is to discourage litigation over the decedent’s estate plan by disinheriting a person who unsuccessfully contests the will and/or trust. The enforceability of these provisions varies from state to state; however, Colorado has determined that a no contest clause is valid when the contesting party lacks probable cause to bring their challenge. See Colo. Rev. Stat. §§ 15-11-517, 15-12-905. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-07-03 11:07:112018-07-03 11:07:11No Contest Clauses – Not Just for Wills
The terms Beneficiary and Heir both refer to someone who receives an inheritance after someone passes away. However, while the terms are often used interchangeably, they do not always refer to the same individual or set of individuals. Heirs can be beneficiaries but beneficiaries are not always heirs.
In our practice, we often see issues arising when these 2 sets are not identical or are different than the expectations of the parties. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-02-12 14:46:332018-02-12 14:46:33When Beneficiaries are Not Heirs
In December, President Trump signed into law what is commonly referred to as the Tax Cuts and Jobs Act. This legislation, which is mostly effective as of January 1, 2018, is the first major reform to the federal tax code since 1986 and affects almost every individual and business taxpayers in some way or another. For individuals, the top tax rate has temporarily dropped from 39.6% to 37% and the standard deduction has nearly doubled. Personal exemptions are repealed and the mortgage interest deduction is limited to interest on a mortgage of $750,000 or less per married couple. The AGI limitation for deductions of cash donations to public charities increased from 50% to 60% and the deduction for alimony payments was repealed (for divorces or separations executed after December 31, 2018). Corporate tax rates have dropped from a 35% top rate to a permanent 21% flat rate, a 20% deduction is now available for certain pass through entity income and the corporate AMT has been repealed.
The new tax act also increased the federal estate and gift tax exemption amount. Specifically, for lifetime gifts and the estates of any decedents passing between January 1, 2018 and December 31, 2025, the estate tax and GST tax exemption amounts were increased to $10 million per person, adjusted for inflation occurring after 2011 (expected to be about $11.2 million for 2018). The marginal transfer tax rate remains at 40%. Read more
https://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://fiduciarylawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2018-01-16 10:03:012018-01-16 10:03:01Planning Opportunities Under the New Tax Cuts and Jobs Act
