Welcome to the recently updated version of The Codicil, an Online Companion to The Estate Planning & Community Property Law Journal at The Texas Tech University School of Law.
To our readers, we have decided to move The Codicil to our new EPJ website at http://www.estatelawjournal.org/site/the-codicil/. We will keep this website live as we complete our transition. For new professional and student articles, we will be uploading new content to our new website. Thank you for your continued support. We hope that our new website will provide you a better product than we have had in the past.
Thank you again,
Online Companion Editor, Vol. V. Estate Planning & Community Property Law Journal.
Cutting Up The Inherited Credit Card: Using Incentive Trusts To Deter Irresponsible and Unproductive Behavior In Potential Heirs
By: Mikela Bryant
As the richest country in the world, the United States is home to a large amount of monetary wealth. Where will this money go when the current holders of wealth are gone? A new generation of “trust-fund” babies are closely following the extravagant lifestyles of Hollywood “celebutantes,” relying on inheritances or trust funds as their sole means of income. They are a generation of “give me’s”—trust fund babies—accustomed to getting what they want when they want it. This air of entitlement stems from never having to work a day in their life and knowing they never will. They live foolishly, extravagantly, and irresponsibly off the hard work of their parents and grandparents. This lackadaisical and lavish lifestyle potentially leads to a new generation of trust fund babies who fail to become productive members of American society.
The Lesser-Known Duty to Inform and Report To Beneficiaries of a Trust
By: Trey T. Parker, Esq.
If you are currently serving as a trustee, the settlor may have asked you to withhold certain trust information from the beneficiaries, especially if the beneficiaries are their children. Such requests may appear reasonable. After all, many settlors believe that knowledge of a future inheritance could lead to fighting among the beneficiaries or prevent them from working toward their own financial independence. Even worse, such knowledge could lead to litigation. Despite these well-intentioned motives of the settlors, trustees may have a duty to provide certain information to the beneficiaries about the trust and its administration regardless of any contrary direction expressed by the settlor orally or under the terms of the trust. Therefore, the prudent trustee must familiarize him or herself with a lesser-known fiduciary duty: the duty to inform and report.
Medicare Set-Asides: Encountering and Handling Them
By: Diedre Wachbrit Braverman, Esq.
No doubt you have heard the phrase Medicare Set-Aside, perhaps even seen its abbreviation, “MSA,” but you have probably not considered MSAs to be aspects of your estate planning practice; and, for the most traditional practices, they’re not. However, if you have undertaken any degree of special needs planning with your clients, sooner or later you are going to be asked questions about MSAs. This is because MSAs and SNTs (“special needs trusts”) often overlap and clients will assume that if you handle one, you can handle the other. If a potential client comes to you for a first-party SNT, you need to know at least enough to identify a potential MSA issue and pass it on to an attorney who handles MSAs.
Trust Situs Selection-Tax Havens or Illusory Strategy
By: Timothy W. Holt, Esq. and Melvin R. Hedin, Esq.
Statutory recapture, i.e., a state income taxation scheme relative to a settlor, a trustee, or a beneficiary that, in whole or in part, nullifies any tax benefits derived from the chosen situs of the trust in question, is too often overlooked.
Choosing the situs for a trust generally involves many factors, including the charging order laws of the situs state for asset protection purposes, applicable estate and trust taxation rates and schemes, the costs of administration and litigation in the situs state (if necessary), the level of control that is retained over trust assets, and other factors.