Trusts & Estates Law

All is Not Lost: Copy of Will Lost by Corporate Fiduciary Admitted to Probate

August 21, 2015, 11:06 AM

Sometimes all is not lost when the Will is lost. The Code of Virginia only allows an original document meeting other statutory requirements to be probated but more and more Virginia Circuit Courts are allowing a copy of a Will to be probated if the presenter can prove that the actual original Will was not in the testators possession. If a bank, trust company or perhaps another professional such as an attorney or accountant, is in possession of a testators Will, and the Will is not able to be located, there arises a presumption of lost Will and a photocopy of the Will may be probated. Family members who would inherit under intestacy, but who would not inherit under the Will, may make claims that the testator purposefully revoked the Will during his or her lifetime, however, they will have to establish their position with clear and convincing evidence.

But My Tax Expert Told Me****

August 21, 2015, 10:00 AM

We all know April 15th and the tax filing and payment deadline is almost upon us. Since the Supreme Courts Boyle decision in 1985 (United States v. Boyle, 469 U.S. 241 (1985)), most tax practitioners have operated on the belief that the Courts ruling was an outright holding that the taxpayers reliance on a tax professionals advice was not reasonable cause for failure to pay or file on time and that either would result in imposition of late payment and/or late filing penalty and interest. The 3rd Circuit Court of Appeals (3rd. Cir.) has now shone a little light at the end of the tunnel in the Thouron (Thouron v. U.S., 752 F.3d 311 (2014)) decision and the door is cracked slightly for the taxpayer to obtain possible relief from imposition of those penalties and interest.

Hindsight is 20-20: Simple Estate Planning Steps We Wish Clients Would Take Before Death

August 20, 2015, 3:10 PM

Attorneys in the Kaufman & Canoles Private Client Services Group regularly represent what lawyers call personal representatives: those who are administering decedents' estates, serving as executor under a will or serving as trustee named in a living trust. Time and again we see estate and trust administration complicated or made more costly because of the failure of the decedent to take simple steps during life. Many people die without any planning in place. It is estimated that 40 percent of older Americans have no will. Abraham Lincoln (a lawyer), Sonny Bono and Pablo Picasso all died intestate. But once a person has taken the big important planning steps of creating estate plan documents, some simple, yet key follow up work will save a personal representative work and save the estate money. Some of the more notable or common missed planning opportunities are as follows:

2013 Virginia Legislative Update - Trusts & Estates Law

July 29, 2013, 2:08 PM

The 2013 session of the Virginia General Assembly resulted in several important changes to trusts and estates law, most of which became effective July 1, 2013. Below are some of the more notable changes.

It's Not Set in Stone: Reciprocal Wills Do Not Automatically Create an Irrevocable Estate Plan

March 22, 2013, 8:43 AM

In a world with an ever increasing number of blended families and second marriages, it is not uncommon for couples to desire to treat all of their children and step-children equally. On many occasions such couples elect to prepare wills or revocable trusts that provide for all assets to pass to the surviving spouse, and upon the death of the surviving spouse, to pass such assets to all of the husbands children and the wifes children, with each child getting an equal share. Alternatively, sometimes a couple may decide that upon the death of the second spouse, one-half of the assets will pass to the husbands children and one-half of the assets will pass to the wifes children.

Taxation of Corporate-Owned Life Insurance: Traps for the Unwary

October 25, 2012, 9:25 AM

Most corporate clients assume that proceeds of a life insurance policy insuring the life of an employee are tax free. Revisions to the Internal Revenue Code in 2006 provide, however, that life insurance proceeds are included as taxable income of the corporate owner of a life insurance policy unless certain IRS requirements are met.

Stuff Happens

August 15, 2012, 8:30 AM

When parties get together contemplating a proposed new venture, it is similar to a new marriage. They are very excited about the future opportunities, but have not really thought through the issues if events do not go as anticipated. Whether the venture takes the legal form of a corporation, limited liability company or partnership, many issues are common with each. While the parties may recognize that it is appropriate to have a buy-sell agreement, operating and/or partnership agreement depending on the particular entity (collectively entity agreement), at the initial stages of the venture they may not have either the resources or the historical perspective to appreciate and plan for what is going to or could happen down the road as their circumstances change. As they continue to make money and develop the business, one of the last things with which they typically wish to deal, is updating the entity agreement or dealing with problems for which there may be no easy solutions. Unfortunately, when one party later wishes to retire or has a terminal illness, they may find that their lack of planning not only puts their future, but also that of their family in a situation which was never contemplated. The consequences can be even more significant if the business interest represents the major asset of the owners estate.

2012 Virginia Legislative Update - Trusts & Estates Law

August 14, 2012, 10:37 AM

The 2012 session of the Virginia General Assembly resulted in several important changes to trusts and estates law, most of which became effective July 1, 2012. Below are some of the more notable changes.

Interference with Inheritance: A Novel Legal Theory

July 18, 2012, 10:39 AM

Unless you closely followed the legal victory of the late Vicki Lynn Marshall, a.k.a. Anna Nicole Smith, you are probably unfamiliar with the legal action known as tortious interference with expectancy of inheritance or gift. While this tort has been rejected by Virginia courts, it has long been recognized in North Carolina as well as at least nineteen other states. Where it is a cognizable claim, the tort is committed when a third party through fraud, duress, undue influence, or some other tortious means intentionally interferes with the receipt of a beneficiarys expected inheritance or gift. In order to be successful, a claimant must provide proof that, but for the interference, the bequest or gift would have been made.

Self-Settled Spendthrift Trusts

June 28, 2012, 8:52 AM

As of July 1, 2012, Virginia will permit the creation of self-settled spendthrift trusts. Under the new law1, a settlor may establish a qualified irrevocable discretionary trust which will not be subject to the settlors creditors claims.

Private Client Services Update - Protecting Your Most Precious Assets...Your Children

May 1, 2012, 8:26 AM

Often, when I meet with clients to discuss their estate plan, one of the most difficult decisions that they face is naming a guardian for their minor children. A guardian is the person or persons who are nominated in the Last Will and Testament of a decedent to provide for the care and custody of minor children in the event that neither of the natural parents survive until all of their minor children attain the age of majority. In essence, a parent is being asked to name a substitute for himself or herself to continue to raise his or her children in the extremely unfortunate event that he or she is not able to do so.

Adding Value as Trustee of a Life Insurance Trust

March 20, 2012, 2:57 PM

Over the last few months, as either an advisor or trustee, I have been reviewing various existing and proposed life insurance policies, both conventional and universal life. In each case, my starting point has been to think about the purpose of the policy, the risk tolerance of the client or trust and the assumptions on which the income projections of the policy are based. Often this process involves having the insurance agent run new projections for a policy.

Use of Small Estate Affidavits to Clean Up After Probate Avoidance Trusts

March 5, 2012, 2:55 PM

These days it is very common for estate planning clients to create revocable trusts for probate avoidance and ease of estate administration, even if the clients do not face estate tax liability under the current system. As we are well aware, those clients fail to achieve the probate avoidance benefits of their trusts if they fail to fund their trusts during their lifetimes. Attorneys and other advisors should (and often do) work with clients to ensure that most of their assets, and certainly all the large assets, are in their trusts. We draw deeds to transfer real estate to the trusts. We re-title their brokerage accounts, their stock, their CDs and their money market accounts. Sometimes, we even have clients transfer their regular checking accounts, their vehicles and their tangible personal property into their trusts.

IRS Has Two Smash Hits and Releases Offshore Voluntary Disclosure Program III

February 1, 2012, 9:32 AM

On January 9, 2012, the IRS reopened its successful Offshore Voluntary Disclosure Program to encourage taxpayers with undisclosed offshore accounts to come into compliance with U.S. laws. A previous program, known as the Offshore Voluntary Disclosure Initiative (OVDI), was announced on February 8, 2011, and expired on September 9, 2011, following an extension due to Hurricane Irene. The Offshore Voluntary Disclosure Initiative followed the 2009 Offshore Voluntary Disclosure Program (OVDP), which was open to taxpayers from March 2009 through October 15, 2009.

Special Attention for Special Needs

January 25, 2012, 4:27 PM

Imagine the following situation. Sam and Sue are in their early 80s, live in Virginia Beach, and are the proud parents of 3 children. Two of them, Bill and Betty, are grown, married, and between them have produced 6 wonderful grandchildren, all of whom live on the West Coast. Unfortunately, Jack, the third child, is bipolar and has numerous health issues, including impaired vision and serious periodontal disease. Unable to live on his own at 53 years of age, he lives in a group home in Norfolk. Jack receives Medicaid and Supplemental Security Income (SSI), both of which are primary means-tested government benefits.

Is It Time to Throw Traditional Estate Tax Planning Out the Window?

January 3, 2012, 3:24 PM

When Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Act) in December 2010, it finally provided some guidance and certainty -- albeit for just two years -- for the estate tax planning world. Most of the characteristics of the estate tax regime created by the 2010 Tax Act resemble the estate tax planning regime in effect during the past decade unlimited marital and charitable deductions and limited individual exemptions for estate, gift and generation skipping transfer (GST) taxes. Notably, however, the estate tax, gift tax and GST tax exemptions increased to $5 million from the 2009 levels of $3.5 million, $1 million and $3.5 million respectively. Additionally, the 2010 Tax Act created a new concept that had not been a part of the prior estate tax regime the concept of "portability."

Issues with Real Estate in a Decedents Estate

December 2, 2011, 3:25 PM

The sale of real estate under Virginia law in connection with a decedents estate can involve a number of legal and practical considerations that can be affected by whether a decedent dies with or without a will.

Asset Protection-Domestic Asset Protection Trusts (DAPTs) Take a Hit

November 28, 2011, 4:09 PM

One of the hot topics among planners over the last several years has been how to utilize the laws enacted by several states (now five) allowing a person to create his own self settled trust or domestic asset protection trust (called a "DAPT"), which have been promoted as not reachable by creditors, if they satisfy the elements of the particular state statue. In this type of trust, the client transfers his own assets to a Trust in which he is a beneficiary and, while trying to get the best of all worlds, remains a beneficiary of his own assets, but prevents creditors from reaching those assets if financial times turn south on him. Clients also have utilized the laws of foreign jurisdictions such as Bermuda, Cayman Islands and other offshore havens which were friendly to debtors and not so to creditors to try to achieve these same goals with mixed success. A recent case in the Bankruptcy Court for the District of Alaska, one of the five states having such favorable legislation, has raised a real question of whether these DAPTs will work, especially if a bankruptcy is involved.

Capacity and Undue Influence Issues in Estate Planning - Incapacity for One Purpose Does Not Mean Incapacity for Another

October 28, 2011, 8:49 AM

In my practice, I am often faced with the difficult issue of evaluating the capacity of an older adult client.In the beginning stages of dementia, does the client have the capacity to make important decisions and sign legal documents?Another challenging situation, which frequently occurs concurrently with capacity issues, is undue influence.Adult children and other family members often exert significant persuasive powers and control over elderly adults.When does the level of influence constitute undue influence and potentially invalidate the actions of the elderly adult?This year, the Virginia Supreme Court addressed both of these topics in the case of Parish v. Parish1 .