Archive for category: Estate Planning

Clients’ Failure to Keep Estate Plans Current Can Sabotage the Entire Estate Plan

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by Carol Warnick

Estate planners work hard to set up estate and wealth transfer plans that fit a client’s needs and ensure that everything works together for the client.  Unfortunately, as the client’s situation changes, they often don’t inform the estate planning attorney so appropriate changes can be made to the estate planning documents.

Common examples are divorce, having additional children, or even a changing relationship with a child or children who may be named as successor trustee.  A child could also encounter difficulties in his or her life that change the way the parent may want the assets to go to the child.  A change in a child’s life could also change the suitability of that child to act as an agent or a trustee in the parent’s estate plan. Read more

Discounted Assets and Funding Challenges in Estate Administration

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by Kami Pomerantz

Estate of Miriam M. Warne, T.C. Memo 2021-17 (February 18, 2021)  (“Warne”), a recent Tax Court case, illustrates a potential mismatch between the value of an asset for estate tax purposes and the value of the asset for purposes of the marital or charitable deduction from estate tax.  This mismatch can lead to a phantom loss of estate value for purposes of such deductions and cause an inadvertent estate tax surprise.  Although this mismatch can be avoided, it requires those drafting specific gifts and administering an estate to choose assets carefully when making bequests and funding decisions.

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Utilizing a Power of Appointment Committee in WINGS

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by Carol Warnick

As previewed in my blog post of January 25, 2021, Wyoming laws provide an opportunity to utilize a Wyoming Incomplete Gift, Non-Grantor Trust (“WING”) to potentially avoid state income tax on the sale of assets.  My previous post outlined the basic rules that must be followed for the WING to work properly, and in this blog post I want to focus on the distributions by committee in a WING.

The Distribution Committee must have at least two members other than the grantor and his or her spouse who are “adverse.”  An “adverse” party is defined in the Internal Revenue Code[1] and Treasury Regulations as someone who has a substantial beneficial interest in the trust which would be adversely affected by the exercise or non-exercise of the power possessed.  The other beneficiaries of the trust fit the description of adverse parties and are typically the other members. Read more

Using a WING to Avoid State Income Tax on a Sale of Assets

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by Carol Warnick

One strategy for a client who wants to avoid state income tax on a sale of assets is to utilize a WING, a Wyoming Incomplete Gift, Non-Grantor trust (“WING”).  Certain other states allow ING trusts, but this blog post refers specifically to the ING trust in Wyoming, or the WING.  It is a self-settled irrevocable trust that is designed, as the name suggests, for the assets gifted to the trust to be an incomplete gift for transfer tax purposes. Read more

Options for Transferring Vehicle Titles – Before or After the Owner’s Death

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by Jody H. Hall

Navigating the DMV can make anyone skittish, but in the specialized area of trusts and estates, it makes people downright nervous.  In addition, the Colorado DMV generally requires their own forms for transfers before or after death.  As with all other assets, the name or names on the actual vehicle title is going to control how we need to dispose of or transfer that vehicle when needed.  Below are a few forms specific to the unique needs of trust and estate practitioners and their clients and links for your convenience. Read more

Utah Uniform Electronic Wills Act Set for Approval

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by Peter K. Smyth

Although the COVID-19 pandemic has changed many aspects of our lives, one thing that has not changed is the importance of estate planning. Creative, in-person signing ceremonies have emerged to ensure that plans are validly executed, including witnessing from opposite ends of a large conference table, witnessing signings through windows, and signing from six feet away, stepping back six feet while witnesses sign with their own pens, and retrieving documents only after witnesses have, in turn, stepped back six feet.

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Remotely Located Witnesses on Wills and Other Estate Planning Documents

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by Jody H. Hall

A few weeks ago, I shared an overview of remote notarizations in Colorado.  The Governor’s executive order suspending the requirement for a notary public to be physically present with the signer, along with the emergency notary rules surrounding a notarization via real-time audio-video communication issued by the Colorado Secretary of State, have given practitioners the ability to help their clients execute estate planning documents in a safer environment during the pandemic, and for the future.  However, while the ability to notarize documents remotely has proven helpful, estate planners were still faced with the particular challenge involving the execution of documents that require witnesses, and how to execute a fully signed, notarized and witnessed original Will.

Earlier this year, the Colorado Supreme Court promulgated Rules 91 and 92 of the Colorado Probate Rules allowing for the remote witnessing of certain specified documents.  See here.  These rules were effective immediately and are in effect during any period of a public health crisis declared in Colorado requiring physical and social distancing.  Rule 91 details the procedure for remote witnessing of certain non-testamentary documents, including living wills, anatomical gifts and medical powers of attorney.  Rule 92 allows for remote witnesses on last wills and testaments.

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Will Normal Advanced Directives be Sufficient for COVID-19?

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by Carol Warnick

While we deal with an unprecedented global pandemic which alters life as we know it for all of us, COVID-19 brings up concerns regarding our clients’ Advanced Directives that were prepared and signed during “normal” times. 

When thinking about being in a terminal or a persistent vegetative state, a client may have filled out a form with a prohibition against “excessive” medical treatments, such as being intubated using breathing machines, respirators, or ventilators.  If that same client contracts COVID-19, intubation may be a life-saving treatment and one that the client would want to have available to him or her. 

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Tax and Estate Planning Perspectives

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by Kami A. Pomerantz

From a tax and estate planning perspective, we would like to make you aware of the following:

Tax Filing Extensions:

The IRS has extended the filing and payment deadline for all 2019 income tax returns to July 15, 2020. This means that no penalty or interest will be assessed for an individual’s failure to file or pay income taxes, regardless of amount, until after July 15, 2020.

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Arbitration Clause Held Not Enforceable as to the Validity of the Trust Amendment

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by Carol Warnick

There has been considerable discussion regarding including arbitration clauses in estate planning documents over recent years. Some estate and trust attorneys are actively pushing for the inclusion of such clauses.  Recently, an Arkansas Appellate Court held that an arbitration provision in a trust, if enforceable at all, would not be enforced to determine the validity of a trust document – in this case a trust amendment.[1]

The decedent’s revocable trust already provided an arbitration clause, but just before his death, he signed a trust amendment expanding the arbitration clause to purportedly cover all disputes and be binding on all trustees and beneficiaries. 

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