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Charitable Gifts to Supporting Organizations

With research and drafting assistance provided by our extern from Washington University School of Law, Rachael Lynch.

As we discussed in our prior post, Review of Income Tax Deduction Rules for Charitable Gifts, an income tax deduction up to fifty percent (50%) of the taxpayer’s adjusted gross income is allowed for gifts to public charities of non-capital gain property and up to thirty percent (30%) for gifts of capital gain property. These same contribution limits apply to gifts to supporting organizations.

What is a supporting organization? Supporting organizations are described in Section 509(a)(3) of the Internal Revenue Code as charities that carry out their exempt purposes by supporting other public charities. A supporting organization generally warrants public charity status because it has a relationship with its supported organization sufficient to ensure that the supported organization is effectively supervising or paying particular attention to the operations of the supporting

Boone County Treasurer Recognizes Same-Sex Marriage

Boone County Treasurer Recognizes Same-Sex Marriage

February 27, 2014

Authored by: Stephanie Moll and Alan Singer

With drafting assistance provided by our extern from Washington University School of Law, Rachael Lynch.

According to the Columbia Daily Tribune, effective immediately, same-sex marriages will be recognized in Boone County, Missouri for purposes of collecting unclaimed property.  This means that same-sex spouses legally married in a state other than Missouri (Missouri’s Constitution currently bans same-sex marriage) may have a right to some of the almost $68,000 held by the county.  Boone County Treasurer, Nicole Galloway, announced that this transition was merely an extension of the full-faith and credit that her office gives to legal documents from every state (and follows Missouri Governor Jay Nixon’s executive order that Missouri would recognize jointly filed income tax returns from legally-married same sex couples who file jointly for federal purposes).

Wisconsin Appellate Court Considers Distribution Value Of Trust Assets

February 26, 2014

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Originally posted on bryancavefiduciarylitigation.com

In In re Alice J. Welch Revocable Living Trust (Vandenbrook v. Welch), a Wisconsin appellate court was required to interpret a provision in a trust instrument on how trust assets would be valued for purposes of distribution. The trust instrument provided different distribution schemes, depending on whether a certain value exceeded $5 million. So, the first question for the court was whether the value of these assets exceeded $5 million. Let’s take a look at the differing interpretations and why trust language can’t be read in isolation.

One party, Jon Welch, claimed that the $5 million cut-off point for distributing the estate was the “adjusted gross estate as finally determined for federal tax purposes.” He claimed that the trial court erred in deciding that the value was less than $5 million because it removed certain assets and loans from the total estate value. He

Tennessee Requires All Witnesses To A Will To Testify

February 24, 2014

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Originally posted on bryancavefiduciarylitigation.com

When it comes to will execution, sometimes the belt and suspenders approach may be well advised.  But, other times, less is more.  Like, perhaps, when it comes to the number of witnesses.  When state law requires that you only need a set number of witnesses to a will, the Court of Appeals of Tennessee’s opinion in the will contest case of Estate of Woolverton shows us the potential problems that may arise when you bring in extra, unnecessary witnesses.

In Tennessee, the execution of a will requires only two witnesses.  Three witnesses, however, signed the will of Dennis R. Woolverton.  At a hearing on the will contest, only two of the three witnesses and a notary public testified about the signatures on the purported will.  The trial court held that the document was the decedent’s validly executed will and admitted it to probate.

Missouri Court Upholds Trust—Farm Remains in Family

Maintaining property in a family for generations to come can be tricky.  As the parties in Hoefer v. Musser found out, the intention of a decedent speaks volumes and can overcome procedural deficiencies such as an improper recording of a warranty deed.  In Hoefer, the Missouri Court of Appeals (Southern Division) recently held in favor of a decedent’s wishes to keep a farm in his family for “generations and generations.”  See Hoefer v. Musser, No. SD 32576, 2013 WL 6800823 (Mo. App. S.D. Dec. 23, 2013).

In Hoefer, the decedent’s nephew (Hoefer) was appointed as successor trustee to decedent’s irrevocable trust—the “Vineyard Dwain Hoefer Trust,” created during Hoefer’s lifetime.  Musser, the decedent’s niece, was appointed as personal representative to Hoefer’s estate.  The trust’s only asset was the decedent’s farm, which he intended to keep in his family for as long as possible by granting the

GRATs for Emerging Companies in Low Interest Rate Environments

The use by the founders of Facebook and Twitter of grantor retained annuity trusts (“GRATs”) to reduce estate taxes has been widely publicized. What many founders and entrepreneurs may not realize, however, is that the same techniques may be appropriate for companies with more modest growth potential and that considering the use of a GRAT at an early stage may be advantageous. GRATs have been discussed previously on the blog here.

In essence, a GRAT is a method to “freeze” the value of an asset at a particular point in time so that the future appreciation of that asset’s value escapes estate tax. A grantor contributes assets to a GRAT in exchange for the right to receive fixed annual payments from the GRAT for a number of years (not for life). The amount of each annual payment includes a return of a portion of the principal amount contributed plus

Trust Was Modified, Not Terminated

Trust Was Modified, Not Terminated

February 18, 2014

Authored by: Luke Lantta

Originally posted on bryancavefiduciarylitigation.com

When a trust instrument sets a time for termination of the trust, it terminates, right?  Well, maybe not.  According to the Kansas Court of Appeals in Lindholm v. Melland (2014 WL 278774) (unpublished), under certain circumstances a trust may continue in existence beyond a termination event.  What happened here to keep the Francis G. Melland Trust going over a decade after it was supposed to terminate?

Francis G. Melland created an irrevocable trust for the benefit of his children, Hugh, Theodore, and Jenny.  Francis’ wife, Sandra, was the original trustee, but she was later replaced by Hugh.  By the terms of the trust instrument, the trust was to terminate when the youngest beneficiary reached the age of 40.  That happened in 2002.  But, in 2002, the trust was neither dissolved nor its assets distributed.  Then, Hugh became the successor trustee in 2005 – three years after the trust

Young Professionals: Four Practical Estate Planning Steps to Check Off Your List

February 17, 2014

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Many people in their 20s and 30s are more interested in checking off a bucket list than addressing important issues related to estate planning. Young professionals are already quite busy juggling all sorts of concerns – new jobs, new families, new home, adjusting to a new stage of life, but few include estate planning on this list. Despite the popular mantra from Ke$ha to “live like you’re going to die young”, few young adults actually anticipate the possibility of doing so. The following are a few simple steps to enable you to ease the burden on loved ones before life becomes even more complicated.

1. Who do you want to receive your stuff? Put it in writing.

Estate planning does not just involve mass amounts of money – we all have

Planning For the End You Want

Planning For the End You Want

February 10, 2014

Authored by: Steve Dawson and Anne Jump

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Recent news stories such as that of Marlise Muñoz in Texas and auto racing star Michael Schumacher serve as a reminder of the importance of discussing your wishes with others regarding end-of-life care. Select someone you trust to make those decisions on your behalf in case you become incapacitated, and sign the documents required to empower that person to act for you if necessary.

Most Americans say they want to die at home, surrounded by family and friends. But data from Medicare shows only about a third of elderly patients die this way. Taking a few small steps now can go a long way toward ensuring that your wishes are respected when the time comes.

You can start by talking to your family, your friends, and your doctors about

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