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IRS Announcement Regarding Recognition of Same-Sex Marriages

The IRS today announced that, in light of the Supreme Court’s decision in United States v. Windsor, all legal same-sex marriages will be recognized for federal tax purposes, regardless of whether the couple’s state of residence recognizes the marriage.

For the full announcement, click here.

2013 Amendments to Delaware Trust Laws

August 29, 2013


Originally posted on

Effective earlier this month, Delaware once again amended its trust statutes.  In what has become an (almost) annual ritual, Delaware has tweaked its trust statutes in an effort to make the state a more appealing jurisdiction for trust administration.  A full look at the law is here, but here are some of the highlights:

Children Born Out of Wedlock 

Section 1 of the Act amending the trust statutes cross-references the legitimation process elsewhere in the Delaware Code for purposes of intestate succession for persons born out of wedlock.

Definition of “Governing Instrument”

The definition of “governing instrument” now also expressly includes “any instrument that modifies a governing instrument or, in effect, alters the duties and powers of a fiduciary or other terms of a governing instrument.”

No Duty to Inquire to Satisfy Prudent Person Standard

The amendments clarify that a fiduciary has no duty to inquire as to the nature and extent of investments held

Best Lawyers in America–2014

August 27, 2013


Best Lawyers in America–2014

August 27, 2013

Authored by: Stephanie Moll

Congratulations to the following Private Client members for their inclusion in the 2014 edition of The Best Lawyers in America, the oldest lawyer-rating publication in the U.S. Selection is based on a peer-review survey in which leading attorneys cast almost 5 million votes on the legal abilities of other lawyers in their specialties.


William Linkous Jr. for Litigation – Trusts and Estates

William Linkous Jr. for Trusts and Estates

Frank S. McGaughey for Trusts and Estates


Renee M. Gabbard for Trusts and Estates

Kansas City:

B. John Readey III for Trusts and Estates

St. Louis:

Lawrence Brody for Tax Law

Lawrence Brody for Trusts and Estates

Michael N. Newmark for Tax Law

John D. Schaperkotter for Trusts and Estates

Kathleen R. Sherby for Litigation — Trusts and Estates

Kathleen R. Sherby for Trusts and Estates

Franklin F. Wallis for Trusts

Massachusetts Supreme Court Approves Decanting in Kraft Family Trust


What does a trustee do when an irrevocable trust needs to be modified?  Circumstances or laws may have changed in ways that could not have been anticipated at the time the trust was drafted.  In the past, a trustee who wanted to change some aspect of an irrevocable trust had few options, other than a court order to reform the trust which can be a costly and lengthy process.  Now, many states have alleviated the necessity of court approval to modify trusts by permitting “decanting.”  (For an example of such a statute, see our prior post, “How is an Illinois Trust Now Like a Fine Wine? It Can Be Decanted: A Summary of the New Illinois Decanting Statute”.)

Decanting is the term generally used to describe the distribution of trust property to another trust pursuant to the trustee’s discretionary authority to make distributions to, or for the

IRS Takes Restrictive Position on Ability of Trust to “Materially Participate” in Pass-Through Entities

Beginning this year, individuals, estates and trusts will be subject to a Medicare contribution tax equal to 3.8% of the trust’s undistributed net investment income for the tax year, complicating the administration of estates and trusts. (IRC § 1411) As a result of the enactment of the new tax, every trust that owns an interest in a trade or business must now determine whether or not the trust materially participates in that trade or business in order to determine whether the trust’s undistributed income may be subject to the tax.

Net investment income is income from passive activities. Whether an activity constitutes a passive activity is determined in accordance with IRC § 469, which sets forth the law with regard to passive activity losses and credits. A “passive activity” is a trade or business activity in which the taxpayer does not materially participate. A taxpayer is treated as

IRS Rules No Fault Does Not Mean No Penalty in IRA Rollover Snafu

At first blush, Chief Counsel Advice Memorandum CCA 201313025, may seem overly harsh. After all, the taxpayer was relying on information provided to her from her employer when she took her lump sum distribution and rolled it over into an IRA. However, the government was simply following the statute and regulations in refusing to refund the excess contribution penalty.

Here, the taxpayer’s former employer was overly generous to the taxpayer and, in making the lump sum distribution to her, distributed more to her than was in her qualified plan, and reported to her on a 1099R that the entire amount of the distribution was an eligible rollover distribution. Believing that she was entitled to the entire distribution and that it was entirely an eligible rollover distribution, the taxpayer rolled over this entire distribution including the over-payment to her rollover IRA and reported the lump sum distribution and rollover as

DOMA – Round 2 (The First Decisions After Windsor)


Windsor was decided just over a month ago and we’re already starting to see how courts are interpreting the ruling. Windsor left unanswered the question of whether Part 2 of DOMA, which allows states to bypass the Full Faith and Credit Clause of the Constitution for same-sex marriages validly performed out-of-state, can stand now that Section 3 of DOMA has been deemed unconstitutional.  [Click here or here for additional information.]

Last week, a federal district court in Ohio ignored an Ohio law that refuses to recognize same-sex marriages, even if validly performed in another state (sometimes referred to as a mini-DOMA). In Obergefell v. Kasich, the plaintiffs, both Ohio residents, briefly traveled to Maryland earlier this month to get married, not even getting off the plane before returning home to Ohio. One spouse was dying of ALS and the other wanted to be recorded as the surviving spouse on

When a Woman Loves a Woman (With Apologies to Percy Sledge…): The Supreme Court Strikes Down DOMA

womanwomanOn June 26, the US Supreme Court decided the case of United States v. Windsor, holding (1) that the Court had jurisdiction to consider the merits of the case, and (2) that Section 3 of the Defense of Marriage Act (“DOMA”) is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment. For a description of the previous history of the case, see our prior posts here and here. In a 5-4 opinion, Justice Kennedy delivered the opinion of the Court. Justices Ginsburg, Breyer, Sotomayor and Kagan concurred, while Justices Scalia, Roberts, Alito, and Thomas dissented.


Edith Windsor (“Windsor”) and Thea Spyer (“Spyer”), New York residents, were legally married in Ontario, Canada, in 2007, after being in a relationship since 1963.

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