Legislation Update

Charitable Trusts and Donations

IRS DECISIONS, REGULATIONS, AND GUIDANCE

• IRS. Section 664 - Charitable Remainder Trusts. The IRS concluded that the judicial reformation of a trust, intended to qualify as a fixed percentage CRUT under IRC § 664(d)(2), to correct a drafting error which created a single-life CRUT rather than a two-life CRUT does not violate IRC § 664, is not an act of self-dealing under IRC § 4941, and does not jeopardize the treatment of the trust as a valid CRUT under IRC § 664(d)(2). Westlaw: PLR 201048031, 2010 WL 4914123 (December 3, 2010); Web: PLR 201048031, IRS Written Determinations (December 3, 2010).

Elder Law

ARTICLES

• Chronic Illness Practical Planning and Drafting, Part 1. Martin M. Shenkman, Joshua S. Rubenstein. (Probate and Property, January/February, 2011). Westlaw: 25-FEB Prob. & Prop. 36; Web: Probate and Property (ABA RPTE members only).

BLOGS AND WEBSITES

• AoA ENews. The Administration on Aging, in the federal Department of Health and Human Services, issues a monthly newsletter. Among the stories included in the latest edition are articles on the Administration on Aging's new series of webinars focusing on the Patient Protection and Affordable Care Act of 2010 (ACA); aging statistics widgets that may be shared with visitors to your website; the National Alzheimer's Project Act (NAPA) recently passed by Congress that will lead to the creation of a national strategic plan to fight Alzheimer's disease; the Family Caregiver Support webinar, How to Select an In-Home Care Provider, sponsored by the American Society on Aging, slated for February 9 at 1:00 p.m. ET; and a new report from the Alliance for Children and Families on the elderly living in poverty. Web: Administration on Aging: News from AoA January 2011, Press Room (January 2011).
• NCEA e-news. The National Center on Elder Abuse, in the U.S. Administration on Aging, issues a periodic newsletter. Among the stories included in the latest edition are articles on 2010 highlights on developments in policy, awareness and research related to elder abuse; preliminary results of the New York State Elder Abuse Prevalence Study; an interview with Deputy District Attorney Paul Greenwood on prosecuting elder abuse cases; following the latest national news on elder abuse on Facebook and Twitter, and highlights from publications on elder abuse and related issues from the Clearinghouse on Abuse and Neglect of the Elderly's annotated catalog. Web: National Center on Elder Abuse: NCEA e-news December 2010, (Resources, December 2010).

Estate and Gift Taxes

IRS DECISIONS, REGULATIONS, AND GUIDANCE

• IRS. IRS Issues 2011 COLA Adjustments to Certain Tax Items. On December 24, the IRS released Rev. Proc. 2011-12, containing cost of living adjustments for 2011 for certain tax items including the tax rate tables under IRC § 1, including new rates in Table 5, Section 1(e) for estates and trusts as follows:

If Taxable Income Is:		The Tax Is:
Not over $2,300		15% of the taxable income
Over $2,300 but not over $5,450		$345 plus 25% of the excess over $2,300
Over $5,450 but not over $8,300		$1,132.50 plus 28% of the excess over $5,450
Over $8,300 but not over $11,350		$1,930.50 plus 33% of the excess over $8,300
Over $11,350		$2,937 plus 35% of the excess over $11,350

• Westlaw: Rev. Proc. 2011-12, 2011-2 I.R.B. 297, 2010 WL 5216618 (January 10, 2010); Web: Rev. Proc. 2011-12, 2011-2 I.R.B. 297 (January 10, 2010)

OTHER

• CRS. CRS Report Examines Estate Tax Options. On December 23, shortly after passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacting temporary estate tax relief , the Congressional Research Service issued a. report, "Estate Tax Options", comparing alternative proposals that focus on a $1 million exemption and 55% rate, a $3.5 million exemption and a 45% rate, and a $5 million exemption and a 35% rate. Also included in the report are analysis of several policy effects and issues including the share of decedents subject to tax, the effect on revenue, distributions, savings, charitable contributions, compliance and administration, and other aspects such as indexing for inflation and inheritance of any unused exemption from the deceased spouse by the surviving spouse. [Congressional Research Service reports are not directly available to the public. The reports are made public through requests to Members of Congress. Secondary sources include online legal services, like BNA's Taxcore documents available on Westlaw (this report is 10 No. 249 BNA Taxcore 005 (December 30, 2010)). Incomplete collections also exist on the web, often collected by subject. See http://www.opencrs.com].
• Maine. Maine Revenue Services Adopts Amendments to Estate Tax Rules for Determining Domicile. On December 5, Maine Revenue Services (MRS) adopted new Rule 807 on residency for tax purposes with additional information for guardians of incapacitated individuals and individuals residing in residential care facilities and new guidance to spouses of military personnel. The MRS also amended Rule 601 to provide additional guidance in determining the domicile of the decedent at the time of death, guidance to executors of estates when the decedent was incapacitated, and an explanation of the ME QTIP calculation for estates of decedents dying on or after January 1, 2010. Westlaw: ME ADC 18-125 Ch 601, 2010 ME REG TEXT 236700 (NS); Web: Chapter 601: Estate Tax, Chapter 807: Residency, (Maine Revenue Services, 12/5/2010).
• U.S. Court of Appeals. Appeals Court Affirms District Court's Summary Judgment/Sanctions on Estate/Counsel. On December 8, in an unpublished opinion, the U.S. Court of Appeals for the Second Circuit affirmed the District Court's order awarding summary judgment in favor of the Internal Revenue Service and subjecting plaintiff's counsel to "sanctions", dismissing the appeal brought by Michael Adamowicz and Elizabeth Fraser, as executors of their deceased mother's estate, and the Estate's Counsel. The executors claimed the IRS inadequately responded to their Freedom of Information Act requests while plaintiffs' counsel argued that the district court failed to provide him with the notice and opportunity to be heard required by Rule 11 of the Federal Rules of Civil Procedure and due process prior to imposing "sanctions." The court concluded that plaintiffs' remaining arguments were without merit. Westlaw: Adamowicz v. IRS, 2010 WL 5001266 , (2d Cir., No. 10-263-cv (L); unpublished 12/8/10).

Estate and Trust Administration; Probate

ARTICLES

• Keeping Current-Probate. (Probate and Property, January/February, 2011). Westlaw: 25-FEB Prob. & Prop. 28; Web: Probate and Property (ABA RPTE members only).
• Navigating the Minefield of Settlements: a Primer on Tax Issues for the Probate and Trust Litigator. Linda S. Griffin. (Florida Bar Journal, January, 2011). Westlaw: 85-JAN Fla. B.J. 32.
• Probate and Family Court: a Vocation, Not a Job. Judge Paula Carey. (Boston Bar Journal, Winter, 2011). Westlaw: 55-WTR B. B.J. 9.

Estate Planning (Generally)

ARTICLES

• Cashing in the Policy: Will Looming Financial Regulation End the Use of Private Placement Life Insurance in Estate Planning? Rafael Rodriguez. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 151.
• Get Ready for the New Illinois Power of Attorney Act. Mary D. Cascino. (Illinois Bar Journal, November, 2010). Westlaw: 98 Ill. B.J. 568; Web: Handler Thayer (handllerthayer.com).
• "Mind"ing Your Business: Estate Planning Documents and the Levels of Capacity Required for Execution. Georgia Akers. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 55.

IRS DECISIONS, REGULATIONS, AND GUIDANCE

• IRS. Section 6212 - Notice of Deficiency. The IRS concluded that when a taxpayer does not receive a Notice of Deficiency mailed to taxpayer's last known address, but a copy of the Notice is received by the authorized Power of Attorney, whether the taxpayer is entitled to raise challenges to the underlying liability during a Collection Due Process hearing depends upon whether the POA notified the taxpayer with sufficient time for taxpayer to petition the court to dispute the liability. Also, mailing a copy of the Notice to the POA, but not to the taxpayer's last known address, does not satisfy the "last known address" requirement unless the taxpayer receives actual notice within sufficient time to file a timely petition. However, if taxpayer executes a Power of Attorney that directs that original correspondence be sent to the attorney's address, that address becomes a "last known address" for purposes of I.R.C. § 6212. Westlaw: CCA 201050030, 2010 WL 5133472 (December 17, 2010)

Health Care

ARTICLES

• Chronic Illness Practical Planning and Drafting, Part 1. Martin M. Shenkman, Joshua S. Rubenstein. (Probate and Property, January/February, 2011). Westlaw: 25-FEB Prob. & Prop. 36; Web: Probate and Property (ABA RPTE members only).
• Federally Qualified Health Centers: a Healthcare Delivery Model for a Newly Reformed Health System. Kathy Poppitt, Esq. (Health Lawyer, December, 2010). Westlaw: 23 No. 2 Health Law. 1.
• Get Ready for the New Illinois Power of Attorney Act. Mary D. Cascino. (Illinois Bar Journal, November, 2010). Westlaw: 98 Ill. B.J. 568; Web: Handler Thayer (handllerthayer.com).

Interest

IRS DECISIONS, REGULATIONS, AND GUIDANCE

• IRS. Federal Rates; Adjusted Federal Rates; Adjusted Federal Long-Term Rate and the Long-Term Exempt Rate â€" January 2011. Rev. Rul. 2011-2 provides various prescribed rates for federal tax purposes for January 2011. Westlaw: Rev. Rul. 2011-2, 2010 WL 5177978 (December 23, 2010), Web: Rev. Rul. 2011-2, Index of Applicable Federal Rates (AFR) Rulings (December 23, 2010).

Irrevocable Trusts--See Trusts (Generally)

Probate--See Estate/Trust Administration and Probate

Same-Sex Marriage; Civil Unions

ARTICLES

• The Constitutionality of the Defense of Marriage Act and State Bans on Same-Sex Marriage: Why They Won't Survive. W. Sherman Rogers. (Howard Law Journal, Fall 2010). Westlaw: 54 How. L.J. 125; Web: Howard Law Journal.

LEGISLATION

• Illinois. Illinois Religious Freedom Protection and Civil Union Act Signed By Governor. Illinois has enacted legislation creating the Illinois Religious Freedom Protection and Civil Union Act. The Act defines "civil union" as a legal relationship between 2 persons, of either the same or opposite sex, established in accordance with the Act; provides that a party to a civil union shall be entitled to the same legal obligations, responsibilities, protections, and benefits afforded or recognized by the law of Illinois to spouses; prohibits certain civil unions; and provides that the Director of Public Health is to prescribe forms for an application, license, and certificate for a civil union. In addition, there are provisions concerning application for a civil union license; certification of a civil union; and the duties of the county clerk and Department of Public Health. The law also addresses dissolution and declaration of invalidity of a civil union, and provides that a marriage between persons of the same sex, a civil union, or a substantially similar legal relationship other than common law marriage, legally entered into in another jurisdiction, shall be recognized in Illinois as a civil union. Construction, application, religious freedom, severability, and other matters are also addressed. The governor signed the bill on January 31, 2011. (SB 1716, Version: Enrolled). Westlaw: 2009 IL S.B. 1716 (NS); Web: Illinois Legislature.

Special Needs Trusts; Guardianships

ARTICLES

• Get Ready for the New Illinois Power of Attorney Act. Mary D. Cascino. (Illinois Bar Journal, November, 2010). Westlaw: 98 Ill. B.J. 568; Web: Handler Thayer (handllerthayer.com).

Trusts (Generally)

ARTICLES

• Cashing in the Policy: Will Looming Financial Regulation End the Use of Private Placement Life Insurance in Estate Planning? Rafael Rodriguez. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 151.
• In Defense of Sales to Defective Grantor Trusts. Jeffrey D. Steed. (Utah Bar Journal, January/February, 2011). Westlaw: 24-FEB Utah B.J. 28; Web: Utah Bar Journal.
• "Mind"ing Your Business: Estate Planning Documents and the Levels of Capacity Required for Execution. Georgia Akers. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 55.
• Wills, Trusts, Guardianships, and Fiduciary Administration. Mary F. Radford. (Mercer Law Review, Fall 2010). Westlaw: 62 Mercer L. Rev. 365 (Georgia developments).

Wills

ARTICLES

• Cashing in the Policy: Will Looming Financial Regulation End the Use of Private Placement Life Insurance in Estate Planning? Rafael Rodriguez. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 151.
• "Mind"ing Your Business: Estate Planning Documents and the Levels of Capacity Required for Execution. Georgia Akers. (Estate Planning & Community Property Law Journal, Fall, 2010). Westlaw: 3 Est. Plan. & Community Prop. L.J. 55.
• Shariah-Compliant Wills. An Overview. (Probate and Property, January/February, 2011). Westlaw: 25-FEB Prob. & Prop. 58; Web: Probate and Property (ABA RPTE members only).
• Wills, Trusts, Guardianships, and Fiduciary Administration. Mary F. Radford. (Mercer Law Review, Fall 2010). Westlaw: 62 Mercer L. Rev. 365 (Georgia developments).