New York Estate Planning & Elder Law Blog

Many affluent families are increasingly building or buying legacy properties – multi-million dollar properties or compounds that are designed to be shared with family now and for generations to come. This trend comes with the rising interest in multi-generational living and vacationing as well as to be a place where family from around the country or world can gather to be together. However, estate planning with complex family dynamics, lifestyle issues, or logistical problems can often mar what is meant to be a place for family.

Legacy Homes

What make legacy homes different from just a large house are the resort-style amenities being built on the property. Many legacy homes have multiple master bedrooms or mini apartments, sport courts (volleyball, basketball, tennis, croquet), and swimming pools. In-home theaters or teen zones for digital gaming are also commonplace in a legacy home. Lakefront or seaside properties often come with their own dock, boathouse, or beach. Meanwhile, legacy homes in the countryside routinely come with shooting ranges, hunting areas, or equestrian facilities.

For people who are estate planning and have one of their goals as providing for their grandchildren’s education, training, future home, or the like there are many assets that can be suited for that goal. However, there is one asset that does not often come to mind that can cover the expenses of future generations that most elderly couples already possess: life insurance.

Whole Life Insurance

Whole life insurance is a type of insurance that is designed to protect a person over their entire lifetime. Typically, an insured person pays a fixed periodic premium on the insurance, and a death benefit is provided to a named beneficiary when the insured dies. The policy builds in value over the lifetime of the insured as premiums are paid, and if at any time the insured person wishes to terminate the policy, the cash value is surrendered to them.

The United Kingdom recently announced that it had digitized its archives of over 41 million wills registered in England and Wales, dating back to 1858, that will allow people to explore the wills of some of the most influential figures of the last century and a half in addition to researching their own family history. At the click of a mouse, people will be able to find out more about their own relatives as well as the last wishes of some of the most famous figures in English history.

Will Database Project

The HM Courts and Tribunals Service (HMCTS) teamed up with the storage and information management company Iron Mountain to digitize the 41 million wills and last testaments stored in the nation’s archives. The purpose of the project was to open up more public services to the common people. It also allows requests to be dealt with quickly and without people needing to visit the probate registry in person to search the archives.

In a recent opinion released by the Seventh Circuit court of Appeals, the court found that the attorney in charge of a trust was liable for all of the costs of arbitration when the arbitration committee sees fit to assess expenses against specific parties. This case is important because the costs applied after the trustee had settled all claims with the other party and applied even though the trustee had applied for bankruptcy. It also highlights the importance of knowing the level of fiduciary duty and responsibility taken when agreeing to become the trustee for a trust.

Facts of the Case

In 2008, Ms. Lauralee Bell sued Mr. Philip Ruben, a lawyer, for negligently and fraudulently mismanaging her trust, inflicting a loss of $34 million. Mr. Ruben asked to arbitrate the claims and she agreed, but before Ms. Bell could initiate arbitration Mr. Ruben filed for Chapter 7 bankruptcy. Ms. Bell filed an adversary complaint opposing discharge of Ruben’s fraud-based debt to her, and the bankruptcy judge granted Ruben a discharge of his other debts, but not of that fraud debt to Ms. Bell.

The Supreme Court of Montana recently ruled on a case that decided whether the Workers’ Compensation Court properly held that it lacked jurisdiction to consider an estate’s petition because the personal representative of the estate lacked standing. The court reversed and remanded the lower court’s decision to dismiss the representative’s petition.

Facts of the Case

Cristita Moreau’s husband Erwin worked at the W.R. Grace mine from 1963 until 1992. He passed away in 2009 from asbestos-related lung cancer, and in 2010 Ms. Moreau filed a claim for occupational disease benefits with her husband’s workers’ compensation insurance carrier as a personal representative of his estate. The insurance company, Transportation Insurance, denied the claim.

On Dec. 12, 2014 the Internal Revenue Service issued Private Letter Ruling 201450003, in which it considered whether an estate is entitled to a charitable deduction under the federal tax code Section 2055(a) if a portion of a defective charitable remainder trust (CRT) was reformed to satisfy the statutory requirements for a charitable remainder unitrust (CRUT).

IRS Determination

The IRS concluded in its Private Letter Ruling that the proposed reformation would be a “qualified reformation” within the meaning of Section 2055(e)(3) as long as the reformation is effective under local law and the CRUT, as reformed, meets the requirements under Section 664 of the code. The definitions of the CRUT are detailed in that section of the code in addition to in relevant regulations. As a result, as long as the reformation is a qualified one, an estate is entitled to a federal estate tax charitable deduction under Section 2055(a) equal to the present value of the charitable remainder interest and charitable income interest of the CRUT.