Trusts Archives - Samuels Yoelin Kantor LLP

Wendy Williams: Planning to Avoid a Guardianship

March 4, 2024 by Victoria Blachly

TV host and personality, Wendy Williams, has been in the news recently for her challenging health issues, marital drama, and legal woes, after a bank froze her bank accounts due to concerns about whether she needed a protective proceeding/guardianship due to her mental and physical ailments.

Her team recently revealed Ms. Williams has dementia, and rumors abound that it may be alcohol related. A new Lifetime four-part docuseries, Where is Wendy Williams, chronicles the sad tale.

Note that Ms. Williams is only 59-years old, so she likely never expected to face such cognitive challenges that require legal planning and preparation. While she did have a Power of Attorney that identified who should manage her finances, were she to be incapacitated, the court got involved and made a determination that the nominated fiduciary was not the best person suited for that job, and appointed someone else to be her guardian for financial decision making.

Other options that could have been taken to protect herself and her assets include setting up a Trust, where a successor trustee would take over, once she became incapacitated. Naming a professional third-party professional trustee, trust company or bank may have been a better option for Ms. Williams, and may have resulted in a different ruling with the court in New York.

Nobody wants to think of the worst case scenario when discussing their future, but an excellent estate planner will help you talk through your options to bring peace of mind: Plan for the worst and hope for the best!

The Estate of Prince – Let’s Go Crazy!

March 8, 2021April 26, 2016 by Michael Walker

Early reports tell us that the late musician Prince died without a will.

Therefore, Minnesota “intestacy” statutes (i.e. statutes govern estates of decedents dying without a will) are going to control the administration of Prince’s estate. In a legal petition filed on April 26, 2016, by Prince’s sister, Tyka Nelson, Ms. Nelson stated that she did not know of the existence of a will signed by Prince. Because of this, no person currently has the legal right to act on behalf of his estate (such as a personal representative, executor, or trustee). In the petition, Prince’s sister asked a Minnesota probate court to appoint Bremer Trust as the “special administrator” of Prince’s estate. Under the applicable statutes in Minnesota, a special administrator has the legal authority to act on behalf of an estate in much the same fashion as a personal representative or executor.

In the coming months, it is likely that more information will emerge about Prince’s estate and the assets compiled by this intriguing artist. The special administrator will likely face of number of challenging questions, including:

Who is entitled to inherit Prince’s estate? While Tyka Nelson is Prince’s only full sibling, her petition names five “half siblings” as well. Under Minnesota statutes, half siblings are entitled to the same share of an intestate. If other half siblings are discovered, they will also be considered equal heirs of Prince’s estate.
How will Prince’s estate and ongoing business interests be managed? Prince’s estate includes extensive holdings of the rights to the songs he wrote, many of which have never been published or released. As we have seen with celebrity estates of Elvis Presley and Michael Jackson, the artist’s ongoing music sales and other intellectual property continues to have considerable value. Reports indicate that 1 million of Prince’s songs and 231,000 of his albums were sold on the single day in which Prince passed away.
How will Prince’s estate be valued for estate tax purposes? While the executors of Michael Jackson’s estate reported an initial value of $7 million for Mr. Jackson’s estate, the Internal Revenue Service has valued Mr. Jackson’s estate and lifetime taxable gifts of approximately $1.178 billion (yes, that is billion with a “b”). The matter is currently in a disputed case before the United States Tax Court. For iconic celebrities such as Prince, the artist’s mere “name and likeness” will likely be a separate and independent asset of the estate having significant value. Like the intangible goodwill of an ongoing business, an artist’s name and likeness has the potential to produce significant income in the future.

“Electric word life. It means forever and that’s a mighty long time. But I’m here to tell you, there’s something else. The after world (and taxes).”

~Prince. Let’s Go Crazy (as respectfully modified by a humble lawyer).

ABLE Act – New Planning Tools for Families

March 8, 2021November 8, 2015 by Emily Clark Cuellar

On October 5, 2015, Oregon Senate Bill 777D became effective. In this bill, Oregon implemented the federal ABLE (Achieving a Better Life Experience) Act. This legislation gives families use of a tax-deferred savings plan, similar to the 529 college-savings plan, to save for individuals with disabilities. These plans would have the tax benefits of 529 college savings plans combined with the benefits of a special needs trust, in that the account would not count as a qualifying asset when determining qualification for needs based aid such as Social Security Income and Medicaid.

There are important differences between ABLE plans and special needs trusts of which families should be aware. First, ABLE plans can only be created for people who are disabled before the age of 26 and all funds are subject to payback after the recipient’s death. Second, the funds can only be used for qualifying expenses, and that list may be narrower than the qualifying expenses from a special needs trust, depending on how the trust is drafted. Third, contribution and asset caps apply to an ABLE account, whereas they do not apply to a special needs trust. However, the cost of creation and administration of an ABLE plan will likely be significantly lower than those of a special needs trust, making them a helpful planning tool for lower income families.

At this point, though the ABLE Act is now effective in Oregon, it is unclear exactly how the plans will be managed. The IRS issued proposed regulations in June of this year, which gives the state more guidance in establishing the plans. SB 777D requires the Oregon 529 Savings Board to establish rules and maintain the program in accordance with the requirements of the federal ABLE Act. Families who may benefit from these new accounts should keep an eye on the Oregon 529 Savings Board as they draft these rules.

For more information on the ABLE Act, read our previous post “A Tax-Favored Solution for Individuals With Disabilities“.

Recent Legislation: Oregon Uniform Trust Code Revisions

March 8, 2021December 30, 2009 by Victoria Blachly

From time to time, we will publish blurbs on recent local court opinions and state legislation:

Oregon Senate Bill 371

Senate Bill 371 contains multiple, somewhat unrelated, amendments to ORS 130, which relates to trusts.

The first significant amendment adds modification of the terms of a trust (including extending or reducing the period the trust operates) to the list of actions that may be taken through a nonjudicial settlement agreement.

For all actions that can be taken by use of a nonjudicial settlement agreement, section 6 of bill 371 creates a procedure by which any interested person may file the a settlement agreement with the court. The amendment requires notice to all interested persons and an objection period of 120 days. If no objections are filed, the settlement agreement is binding. If there are objections, a hearing is held. An agreement will be approved unless (1) the agreement does not have all the required signatures; (2) the agreement is not allowed under the statute, or (3) the agreement is not equitable.

Another substantive amendment made by Senate Bill 371, Section 9 amends ORS 130.170 to state that “a trust is not a charitable trust if the trust contains contingencies that make the charitable interest negligible.” Another somewhat cryptic amendment appears in Section 16, which amends ORS 130.500 stating “A revocable trust remains a revocable trust for the purposes of ORS 130.520 to 130.575 even though a trust cannot be revoked because: (a) the settlor becomes financially incapable; or (b) an event occurs that by the terms of the trust prevents the revocation of the trust.”

Another major amendment made by Senate Bill 371 adds subsection 10 to ORS 130.710. It provides that a trustee does not need to provide a beneficiary with notice of the right to a trustee’s report or send a trustee report to the beneficiary until six months after the trust becomes irrevocable if the beneficiary’s only interest in the trust is a distribution of a specific item of property or a specific amount of money. It further states that the trustee must provide notice of the right to a trustee’s report if at the end of the six months the beneficiary has not received the distribution

The last amendment made by Senate Bill 371 creates a new party in trust administration called an “adviser.” An adviser can be appointed in a trust instrument to assist the trustee in making decisions regarding distributions, or sales of assets. The adviser will only have power to act as defined in the trust instrument. If the trustee follows the direction of the adviser, the trustee cannot be held liable for any loss as a result of relying on the adviser’s advice. Furthermore, the trustee does not have a duty to monitor the adviser.

Early reports tell us that the late musician Prince died without a will.

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