Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

News of the Firm

We are pleased to announce that Herb Tucker, Laurie Hunter and Kevin Millard were recognized as 5280 Top Lawyers in Denver in 2018. Herb was recognized in the area of Probate Litigation, and Laurie and Kevin were recognized in the area of Estate Planning.

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The Future of Estate Planning

“Alexa, who can I contact to prepare my Will?” Does the future of estate planning fall into the hands of a cloud-based registry?

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Overview of 2018 Tax Act

President Trump signed the 2018 Tax Act into law on December 22, 2017. Most of the provisions apply only to taxable years starting January 1, 2018 through December 31, 2025. The changes in the corporate tax rates are permanent. Wade Ash intends to send out a newsletter in February that will summarize more fully the provisions of the Act, especially as affecting estate planning. The following is a list of some of the major provisions:

    • The estate, gift and generation-skipping transfer tax exemption is doubled from $5 million to $10 million and still indexed for inflation since 2011. The 2018 exemption will be about $11.2 million.
    • The individual standard deduction is also nearly doubled to $24,000 for married filing jointly, and $12,000 for single taxpayers; the income tax rates are slightly reduced.
    • No more deductions for personal exemptions on individual returns (although they apparently do still apply for trusts and estates).
    • Many itemized deductions for individuals were eliminated or reduced:
      • $10,000 limit on the deduction for state and local taxes
      • no deduction for interest on home equity loans, including current loans
      • the deduction for mortgage interest on new loans is only allowed up to $750,000 in indebtedness
      • No deduction for alimony on divorces finalized after 12/31/2018 (and the receipt of alimony will not be taxable income)
      • medical expenses may still be deducted over 10% of AGI
      • charitable contributions may still be deducted (up to 60% of AGI instead of only 50% for cash contributions to public charities)
      • NO miscellaneous itemized deductions, including investment advisor fees, accountants’ fees, attorney fees
    • 529 plan accounts may make qualified distributions for elementary and high school education up to $10,000 per year per student
    • C corporation changes are permanent and include:
      • corporate tax rate reduced to 21% from 35%
      • corporate Alternative Minimum Tax repealed
      • 100% expensing of new and used property used in the business, except for buildings
      • Business expense deductions include state and local taxes without the $10,000 limit
    • New 20% deduction for "qualified business income" under pass-through entities such as partnerships, LLCs and Sub-S corporations
      • Must be income earned in a "trade or business"
      • Deduction excludes income from capital gains, dividends, interest
      • If total income is less than $315,000 for married filing jointly ($157,500 for single taxpayers), no further limit on the deduction.
      • If more than the threshold, subject to limitation of greater of (a) 50% of taxpayer’s share of W-2 wages, or 25% of taxpayer’s share of W-2 wages plus 2.5% of depreciable property
      • If income is over the threshold, no 20% deduction for income from pass- through service companies, including health, law, accounting, performing arts, athletics, financial services, "reputation/skill-based" services, investment management
    • Many issues have not been addressed in the Act, and will need to be clarified in regulations
  • no deduction for business entertainment expenses (except if employees are included, like holiday parties)
  • changes to fiduciary income tax (trusts and estates):
    • miscellaneous itemized deductions (subject to the 2% floor) are NOT deductible
    • items that are deductible are those NOT subject to the 2% floor and include trustee fees, attorney fees to administer the trust or estate, preparation of estate tax returns and fiduciary income tax returns (but not gift tax returns), and administrative expenses such as probate filing fees, appraisals and preparation of accountings
    • state and local taxes up to $10,000 are deductible
    • charitable contributions are deductible if required by the governing instrument
    • trusts and estates still have the personal exemption ($600 for estates, $100 for simple trusts and $300 for complex trusts)
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Electronic Wills–Governor Vetoes Florida’s Electronic Will Statute (Part II)

In 2017, the Florida Legislature approved House Bill 277 promulgating the new Florida Electronic Wills Act (FEWA). The FEWA authorizes the creation of electronic wills and provides that the execution of electronic wills may be witnessed and notarized through the use of remote technology. The Act also specifies that electronic wills for residents, as well as non-residents, may be probated in Florida.

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News of the Firm

We are very pleased to announce that Gary T. Potter joined our firm on July 1, 2016. Gary’s practice will continue to focus on Estate Planning, Probate and Trust Administration. Before beginning his career in the private practice of law, Gary served as a Deputy Colorado Attorney General, Inheritance Tax Division; as a Vice President and Trust Officer with First National Bank of Denver Trust Department; and as Vice President Marketing of Integrated Resources. Gary has served on numerous boards and in leadership positions throughout his career including the Denver Trust Officers Association, Teachers Award Foundation, Craig Hospital Board and the Colorado Golf Association, to name a few.

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819 Hits

Protecting Americans from Tax Hikes Act (the "PATH" Act)

PATH Act of 2015 - Makes 3 charitable giving incentives permanent; clarifies valuation of charitable remainder trust interests.

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1325 Hits

Distribution of Tangible Personal Property

The distribution of tangible personal property is the leading cause of family disputes in probate administration. Frequently, these fights occur in blended families where parents may have promised family heirlooms to children of a prior marriage rather than the second spouse. Estate planners have developed many techniques to help reduce these problems and avoid having off-duty policy officers attend meetings among family members to select personal property. See Wall-Street-Journal-111614.pdf.

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1371 Hits

Digital Accounts - User Names and Passwords

Most of us not only do a lot of our banking, paying bills and managing investments on-line, but we also store photos and other important documents “in the cloud.” On death or incapacity, who would know how to access your accounts? Who would receive notice of bills that are due, and know where you might keep assets? We include references to online accounts, bills and Facebook accounts in our “Family Financial Questionnaire” that we give to our estate planning clients, but it may not be complete. We have also created an Excel spreadsheet with a quick list of common types of online accounts that you can fill out to keep with your important documents and/or give a copy to the person(s) named as your personal representative and agent in the event of incapacity.

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1585 Hits

Kardashian Diaries Suit, Copyrights and Estate Planning

The recent news that the late Robert Kardashian’s widow, Ellen Pearson (a/k/a Ellen Kardashian), has been sued by the Kardashian children (and Mr. Kardashian’s former wife, Kris Jenner), for selling excerpts from their father’s diaries about their lives is a good reminder of the importance of good, clear estate planning documents. Reportedly, Ms. Pearson, who sold portions of the diaries to the tabloids, found the diaries in a box at a vacation home she shared with her late husband. The Kardashian children claim that Mr. Kardashian’s will left the bulk of his tangible and intangible personal property (which would include copyrighted items) to them, including the diaries, and that Ms. Pearson’s sale of them was, among other things, a copyright violation. Interestingly though, Mr. Kardashian’s will may have given both the vacation home and other personal property "customarily used at that property" to Ms. Pearson. The question is whether the property left to Ms. Pearson with the vacation home included the intangible personal property rights (such as copyright and publication rights) in the diaries. Though he probably had no idea his children would have such a public life following his death, had Mr. Kardashian given careful thought to how those diaries and any intangible property rights from photos and other personal effects should be disposed of in his will, and had drafted his plan to clearly reflect that intent, this dispute might have well been avoided. A court has not yet ruled but for estate planners and their clients, the lesson is to plan for all eventualities - who knows, your own kids may turn out to be reality TV stars well after your death and your own notes and photos might be for sale to the highest bidder.
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