TreatiseTreatise

Stocker on Drawing Wills and Trusts (14th Edition)

 by Robert W Sheehan, Michael S Schwartz
 
 Copyright: 2015-2017
 Last Updated: November 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402425127
  • Page Count: 1224
  • Number of Volumes: 2
  •  

Stocker on Drawing Wills and Trusts has been a staple in the library of attorneys and estate planners for more than 50 years. It provides high-quality, comprehensive, field-tested drafting guidance that ensures wills, trusts and other estate planning documents fully express clients’ wishes without provoking costly legal challenges. The book is updated regularly to account for the latest developments in the field.

Stocker on Drawing Wills and Trusts is enhanced by hundreds of labor-saving sample forms and clauses. It provides guidance on how to help clients capitalize on the full range of tax-saving and non-tax opportunities, covering issues such as:

  • pinpointing clients’ concerns and goals before drafting,
  • translating clients’ objectives into precise provisions,
  • selecting the appropriate dispositive scheme for minimizing potential estate, gift and generation-skipping transfer (GST) tax exposure,
  • balancing estate, gift and GST tax savings with income tax consideration,
  • advising clients with respect to the selection of fiduciaries,
  • crafting the scope of the fiduciaries’ rights, powers and responsibilities,
  • avoiding drafting pitfalls,
  • anticipating contingencies that could frustrate a client’s wishes,
  • executing estate planning documents properly so that they withstand potential contests, and
  • comparing New York law, the Uniform Trust Code and the Uniform Probate Code.
Stocker on Drawing Wills and Trusts is a vital planning tool for estates, trusts, and tax planning specialists and any general practitioner involved in crafting wills, trusts or other estate planning documents.
  Table of Contents
Chapter 1: Introductory Matters
  • § 1:1 : Introduction1-1
  • § 1:2 : Scope of Discussion and Forms1-2
    • § 1:2.1 : Uniform Trust Code1-3
    • § 1:2.2 : Uniform Probate Code1-7
  • § 1:3 : Importance of Statutory History1-11
  • § 1:4 : The Drafter’s Objectives1-13
    • § 1:4.1 : Styles of Drafting1-14
    • § 1:4.2 : The Importance of Grammar and Precision of Language1-15
Chapter 2: Pre-Drafting Considerations and Restrictions
  • § 2:1 : Will or Trust?2-3
    • § 2:1.1 : Considerations Regarding the Use of a Will2-3
      • [A] : Potential Disadvantages Associated with the Use of a Will2-4
      • [B] : Other Functions of a Will2-5
      • [C] : Use of Different Wills for Different Jurisdictions2-6
    • § 2:1.2 : Considerations Regarding the Use of a Revocable Trust2-6
      • [A] : Avoiding Probate2-7
      • [B] : Privacy Concerns2-8
      • [C] : Unknown Heirs2-9
      • [D] : Taxes2-9
      • [E] : Management Vehicle/Planning for Incapacity2-10
      • [F] : Flexibility2-12
      • [G] : Record-Keeping Considerations2-13
    • § 2:1.3 : Other Procedural and Dispositive Differences Between Trusts and Wills2-13
  • § 2:2 : Legal Restrictions on Wills and Trusts2-14
    • § 2:2.1 : Capacity and Minimum Age Required for Making a Will or Trust2-14
    • § 2:2.2 : Property Not Disposable by Will or Trust2-15
    • § 2:2.3 : Contract to Make a Will or Trust2-15
  • § 2:3 : Marriage and the Rights of the Surviving Spouse2-16
    • § 2:3.1 : Traditional Marriages2-16
    • § 2:3.2 : Nontraditional Marriages2-18
      • [A] : Federal Same-Sex Marriage Considerations2-19
      • [B] : Statewide Same-Sex Marriage Considerations2-19
        • [B][1] : New York Approach to Same-Sex Marriage2-20
      • [C] : Drafting Suggestions2-22
    • § 2:3.3 : Right of Election of Surviving Spouse2-22
      • [A] : New York Model2-23
      • [B] : Testamentary Substitutes2-25
        • [B][1] : Life Insurance As a Testamentary Substitute for New York Elective Share Purposes2-27
        • [B][2] : Retirement Plans and Options As Testamentary Substitutes2-28
      • [C] : Further Regarding the Elective Share—Calculation2-29
      • [D] : Effect of Real Property Situs on Elective Share2-31
      • [E] : Waiver or Loss of Elective Share (New York Model)2-31
      • [F] : Impact of the Elective Share2-34
      • [G] : Barring Elective Share, Dower, and Other Rights2-35
      • [H] : Preserving Bequests Despite an Election Against the Will2-36
      • [I] : Elective Share Under the Uniform Probate Code2-36
        • [I][1] : 1969 UPC2-36
        • [I][2] : 1990 UPC: Radical Reform2-38
        • [I][3] : 2008 UPC Amendments: Change in Form2-39
    • § 2:3.4 : Impact of Applicable Marital Regime2-40
  • § 2:4 : Rights of Children2-41
    • § 2:4.1 : Forced Heirs2-41
    • § 2:4.2 : After-Born Children or Pretermitted Children2-42
    • § 2:4.3 : Reproduction Technologies2-45
      • [A] : Posthumously Conceived Children2-45
      • [B] : The UPC’s Approach2-50
    • § 2:4.4 : Adopted Children2-52
      • [A] : New York Pre-1964 Precautionary Addendum2-52
      • [B] : Post-1964 New York Law2-53
      • [C] : Other States2-54
      • [D] : Choosing to Exclude Adopted Children2-54
      • [E] : Inheritance Rights of Adopted-Out Children2-55
    • § 2:4.5 : Non-Marital Children2-56
      • [A] : The Evolving Treatment of Non-Marital Children2-56
      • [B] : New York Definition of Paternity2-58
      • [C] : Presumption of Inclusion2-60
      • [D] : Drafting Solutions2-61
      • [E] : Choice of Law2-61
    • § 2:4.6 : Disinheriting Children2-62
  • § 2:5 : Need for a Comprehensive Estate Plan2-62
    • § 2:5.1 : Life Insurance2-63
    • § 2:5.2 : Pension, Profit Sharing, Retirement and Other Benefits2-63
    • § 2:5.3 : Family Residence2-63
    • § 2:5.4 : Lifetime Trusts and Gifts2-64
    • § 2:5.5 : Statutory Rights2-65
    • § 2:5.6 : Taxes2-65
Chapter 3: Introductory Clauses
  • § 3:1 : Wills3-1
    • § 3:1.1 : Name of Testator3-2
    • § 3:1.2 : Recital of Residence3-2
    • § 3:1.3 : Limiting the Scope of the Will Based on Situs of Property3-3
    • § 3:1.4 : Statement Regarding Testamentary Capacity3-4
    • § 3:1.5 : Use of a Heading or Cover Page in Lieu of or in Addition to Introductory Clause3-4
  • § 3:2 : Trusts3-5
    • § 3:2.1 : Trust Agreements3-5
    • § 3:2.2 : Declarations of Trust3-7
  • § 3:3 : Nomenclature—“Last Will and Testament” or “Will”?3-8
Chapter 4: Legacies, Bequests, and Devises
  • § 4:1 : Introduction to Legacies, Bequests, and Devises4-2
  • § 4:2 : Specific Legacies4-3
    • § 4:2.1 : Ademption4-4
      • [A] : Ademption Under the UPC4-6
        • [A][1] : 1969 UPC: The Traditional Approach, Somewhat Liberalized4-6
        • [A][2] : 1990 UPC: A Break from Tradition4-7
    • § 4:2.2 : Specific Bequests to Minors4-7
    • § 4:2.3 : Specific Intangible Bequests4-8
    • § 4:2.4 : “Residual” Specific Bequests4-9
    • § 4:2.5 : Incorporation by Reference, Separate Instructions, and Precatory Requests to the Legatee to Make Gifts4-15
      • [A] : Tax Opportunities4-17
      • [B] : Alternate Approach: Power of Appointment4-18
    • § 4:2.6 : Encumbrances on Bequests4-19
    • § 4:2.7 : Life Estate in Tangible Property4-19
  • § 4:3 : General Legacies4-21
    • § 4:3.1 : Interest on General Legacies4-21
  • § 4:4 : Demonstrative Legacies4-22
  • § 4:5 : Devises of Real Estate4-23
    • § 4:5.1 : Description of Real Property4-24
    • § 4:5.2 : Creation of Tenancy in Common4-25
    • § 4:5.3 : Minor Devisees4-26
    • § 4:5.4 : Compliance with Law of Situs4-27
    • § 4:5.5 : Life Estate in Real Property4-28
    • § 4:5.6 : Condominiums and Cooperative Apartments4-32
  • § 4:6 : Separate or Omnibus Paragraphs4-36
  • § 4:7 : General Legacies, Specific Legacies, and Devises of Real Estate Contrasted; Effect on Post-Death Income and Executors’ Commissions4-37
  • § 4:8 : Residuary Legacies4-39
    • § 4:8.1 : Lapse of Residuary Legacies4-42
  • § 4:9 : Pourover Provisions4-45
    • § 4:9.1 : Reverse Pourovers4-46
  • § 4:10 : Fractional Versus Pecuniary Gifts4-47
  • § 4:11 : Gifts by Implication4-49
  • § 4:12 : Identification of Legatees4-51
  • § 4:13 : Methods of Distribution Among Linear Descendants4-54
    • § 4:13.1 : “Per Stirpes” and “Per Capita”4-55
    • § 4:13.2 : “By Representation”4-58
  • § 4:14 : Effect of Divorce or Other Termination of Marriage4-59
  • § 4:15 : Survivorship of Legatee; Lapse4-61
    • § 4:15.1 : Anti-Lapse: The UPC Approach4-63
      • [A] : 1969 UPC4-63
      • [B] : 1990 UPC: Traps for the Unwary4-63
  • § 4:16 : Preferred Legacies4-65
  • § 4:17 : Abatement of Legacies4-66
  • § 4:18 : Forgiveness of Indebtedness4-67
  • § 4:19 : Advancements4-68
  • § 4:20 : Conditions on Bequests, Legacies, and Devises4-69
  • § 4:21 : Disinheritance of Heirs4-70
  • § 4:22 : Disclaimers and Renunciations4-71
  • § 4:23 : Exercise of Powers of Appointment4-73
Chapter 5: Estate Tax and Planning for the Applicable Credit Amount
  • § 5:1 : Introduction5-2
    • § 5:1.1 : Estate Tax Exemption and Rates—A Brief History5-3
      • [A] : Recapture?5-7
    • § 5:1.2 : Carryover Basis5-8
      • [A] : Applicable Property5-9
      • [B] : Rules for Assets Passing to Surviving Spouse5-10
      • [C] : Exclusion on Gains of Residences5-11
      • [D] : Allocation of Basis Adjustments5-11
    • § 5:1.3 : Potential Tax Reform5-11
  • § 5:2 : Portability and Its Limitations5-12
  • § 5:3 : Credits Versus Deductions5-15
  • § 5:4 : Other Credits Against the Estate Tax5-15
    • § 5:4.1 : State Death Taxes5-16
    • § 5:4.2 : Additional Credits5-18
    • § 5:4.3 : Former Exclusion (Then Deduction) for Portion of Family-Owned Business Repealed5-18
  • § 5:5 : Drafting Approaches5-19
    • § 5:5.1 : Rely on Portability5-20
    • § 5:5.2 : Mandatory Credit Shelter Bequests5-20
      • [A] : Unified Credit Formulas5-22
        • [A][1] : Limitations Based on Increases in Unified Credit5-24
        • [A][2] : Limitations Based on State Versus Federal Exemption5-27
    • § 5:5.3 : Disclaimer Provisions5-28
    • § 5:5.4 : “Clayton” Provisions5-30
    • § 5:5.5 : “Supercharged” Credit Shelter Trusts5-32
  • § 5:6 : Other Considerations Impacting the Credit Shelter Amount5-34
    • § 5:6.1 : Reductions in the Credit Shelter Amount5-34
    • § 5:6.2 : Control Premiums and Minority Discounts—Impact on Credit Shelter Planning5-36
  • § 5:7 : Considerations Regarding Lifetime Giving5-38
Chapter 6: The Marital Deduction
  • § 6:1 : Marital Deduction—General Considerations6-2
  • § 6:2 : Relationship Between Credit Shelter Planning and Marital Deduction Planning6-4
  • § 6:3 : Limitations6-6
    • § 6:3.1 : Quantitative Limitations—Current Unlimited Marital Deduction6-6
      • [A] : Pre-1982 Limitations on Amount of Marital Deduction6-6
        • [A][1] : 1948–1976: 50% of Adjusted Gross Estate; Formulation6-6
        • [A][2] : 1977–1981: $250,000 Floor; Transitional Rule6-7
        • [A][3] : Formula Clauses for Maximum Marital Deduction Before Economic Recovery Tax Act of 1981 (ERTA)6-8
        • [A][4] : 1982: Unlimited Marital Deduction; Transitional Rule6-11
    • § 6:3.2 : Qualitative Restrictions6-12
  • § 6:4 : Trusts Qualifying for Marital Deduction6-13
    • § 6:4.1 : “Traditional” Marital Deduction Trust with General Power of Appointment6-13
      • [A] : Powers of Appointment and Invasion6-17
      • [B] : “Specific Portion”6-18
    • § 6:4.2 : Estate Trust6-18
    • § 6:4.3 : QTIP Trust6-18
      • [A] : Additional QTIP Requirements6-20
        • [A][1] : Distributions to Persons Other than Surviving Spouse6-20
        • [A][2] : Power to Elect QTIP Treatment6-21
          • [A][2][a] : QTIP Election Must Reduce Estate Tax to Zero?6-22
        • [A][3] : Conditional QTIP Provisions6-23
      • [B] : Partial QTIP Elections and Splitting QTIPS6-25
      • [C] : Planning Opportunity: Fractional Discount Available for QTIP and Probate Assets6-26
      • [D] : QTIP Trusts: Final-Period Income6-27
      • [E] : Estate Tax on QTIP Property6-29
    • § 6:4.4 : Provisions Regarding “All the Income” in QTIPs and Traditional GPA Trusts6-29
  • § 6:5 : Marital Deduction Formula Clauses6-33
    • § 6:5.1 : Floor and Ceiling Clauses6-34
    • § 6:5.2 : Maximum-Minimum Marital Deduction Clauses6-36
    • § 6:5.3 : Other (Simpler) Marital Deduction Formulas6-38
    • § 6:5.4 : Pre-Residuary (Pecuniary) Gifts Versus Residuary (Fractional Share) Gifts6-39
      • [A] : Leverage in Appreciation or Depreciation6-40
      • [B] : Valuation Date for Pecuniary Gift6-41
    • § 6:5.5 : Adjustments for Tax Elections6-41
      • [A] : Impact on the Actual Size of the Marital Legacy6-42
      • [B] : Impact on the Size of the Marital Deduction6-42
        • [B][1] : Effect of Deduction for Administration Expenses—Management Expenses Versus Transmission Expenses6-42
        • [B][2] : Planning and Drafting Implications6-43
  • § 6:6 : Marital Trust Planning for Non-Citizen Spouses6-44
    • § 6:6.1 : QDOT Requirements6-45
    • § 6:6.2 : Sample Qualified Domestic Trust (QDOT) Language6-48
  • § 6:7 : Other Marital Deduction Drafting Issues6-51
    • § 6:7.1 : Interest in Unidentified Assets6-51
    • § 6:7.2 : Encumbrances and Obligations6-52
    • § 6:7.3 : Common Disaster and Simultaneous Death6-53
    • § 6:7.4 : Qualifying Retirement Assets for QTIP6-57
    • § 6:7.5 : Marital Deduction for Assets Passing As a Result of a Settlement6-58
    • § 6:7.6 : Source of Payment of Estate Taxes6-59
Chapter 7: Generation-Skipping Transfer Tax
  • § 7:1 : Introduction to the Generation-Skipping Transfer Tax7-2
    • § 7:1.1 : Structure of the GST Tax7-3
  • § 7:2 : Exemptions, Exceptions, and Exclusions from GST Tax7-5
    • § 7:2.1 : GST Exemption7-5
    • § 7:2.2 : Gift Tax Exclusions Applicable to GST Tax7-7
    • § 7:2.3 : Predeceased Child or Collateral Relative Exception7-7
    • § 7:2.4 : Transfers Subject to Gift or Estate Tax7-10
    • § 7:2.5 : Change of Transferor; Reverse QTIP7-10
  • § 7:3 : Determination and Payment of GST Tax7-11
  • § 7:4 : Considerations Regarding Generation-Skipping Trusts7-13
    • § 7:4.1 : Grandfathered Trusts7-14
    • § 7:4.2 : ETIP Period7-15
    • § 7:4.3 : Splitting Trusts7-16
    • § 7:4.4 : “Reverse” QTIP Election7-22
      • [A] : Reverse QTIP Election for QDOT7-22
      • [B] : Constructive Addition Issues7-23
        • [B][1] : Possible Solutions7-25
    • § 7:4.5 : Granting General Power of Appointment7-26
      • [A] : Require Consent7-29
      • [B] : Limit Appointees to Creditors7-30
      • [C] : Include Self-Destruct Clause7-31
      • [D] : Trim the Scope of the Power7-31
      • [E] : Payment of Taxes on Power, Default Provisions, and Coordinating Formulae7-32
    • § 7:4.6 : Dynasty Trusts7-33
      • [A] : Single Pot Versus Stirpital Shares7-34
        • [A][1] : Single Pot Approach7-34
        • [A][2] : Stirpital Shares at Each Generation7-34
        • [A][3] : Comparison of the Two Approaches7-37
      • [B] : Perpetual Term Dynasty Trusts7-37
        • [B][1] : Drafting Flexibility7-39
      • [C] : Other Dynasty Trust Drafting Matters7-40
        • [C][1] : Statement of Intention to Create Perpetual Trust7-40
        • [C][2] : Trustee Appointment Provisions7-40
        • [C][3] : Back-Up Perpetuities Provision7-43
  • § 7:5 : State GST Tax Considerations7-44
Chapter 8: Charitable Bequests
  • § 8:1 : Charitable Legacies and Devises8-2
  • § 8:2 : Limitations on Charitable Gifts8-3
  • § 8:3 : Tax Aspects of Charitable Gifts8-4
  • § 8:4 : Charitable Split-Interest Trusts8-7
    • § 8:4.1 : Charitable Remainder Trusts8-7
      • [A] : Tax Benefits8-8
      • [B] : Trust Language and Operation of CRT8-9
      • [C] : Power to Amend; Statement of Intent8-10
      • [D] : Selection of Trustee, Limitation on Powers8-11
      • [E] : Payments to Non-Charitable Beneficiaries8-11
        • [E][1] : Amount8-11
        • [E][2] : Adjustments8-12
        • [E][3] : Accelerated CRTs8-12
        • [E][4] : “Exhaustion” Concerns for Charitable Remainder Annuity Trusts8-13
        • [E][5] : Trusts for Financially Disabled Beneficiary As the Current Beneficiary8-13
      • [F] : Interest of Successive Beneficiary: Power to Revoke, Estate Tax Concerns8-14
      • [G] : Designation of Charitable Recipients8-15
      • [H] : Net Income Unitrusts8-17
      • [I] : Flip Unitrusts8-19
      • [J] : Right of Election Complications for CRTs8-20
    • § 8:4.2 : Charitable Lead Trusts8-21
      • [A] : Avoiding Estate Tax Inclusion8-24
      • [B] : Generation-Skipping Opportunities8-24
      • [C] : Impact of Grantor Trust Status8-25
      • [D] : Private Foundation As Lead Beneficiary8-27
      • [E] : Income Tax Planning—Ordering of Income8-28
      • [F] : Additional Drafting Considerations8-28
  • § 8:5 : Reformation and Amendment of Charitable Trusts8-30
  • § 8:6 : Private Charitable Foundations8-31
  • § 8:7 : Donor Advised Funds8-33
  • § 8:8 : Community Foundations8-33
  • § 8:9 : Charitable Limited Liability Companies8-34
Chapter 9: Apportionment of Taxes, Debts, and Expenses
  • § 9:1 : Introduction9-1
  • § 9:2 : Paying Taxes Imposed on Probate Estate or Taxable Estate9-2
    • § 9:2.1 : Effect of Lifetime Gifts9-4
      • [A] : Use of Applicable Credit Amount9-4
      • [B] : Gift Tax Paid or Payable9-5
  • § 9:3 : Interrelation of Tax Clauses in Will and Inter Vivos Trust9-8
  • § 9:4 : Allocation of GST Tax9-9
  • § 9:5 : Allocation of State Taxes9-10
  • § 9:6 : Estate Tax on Qualified Terminable Interest Property9-11
    • § 9:6.1 : Direction in First Testator’s Will or Trust9-13
    • § 9:6.2 : Provision in Surviving Spouse’s Will or Trust and Protective Statutes9-13
    • § 9:6.3 : Right of Recovery from QTIP9-14
  • § 9:7 : Allocation of Tax on Life Insurance and Other Non-Probate Assets9-15
  • § 9:8 : Allocation within Residuary Estate9-16
  • § 9:9 : Allocation of Taxes Attributable to Tax-Preferred Assets9-17
  • § 9:10 : Allocation of Debts and Expenses9-19
  • § 9:11 : Composite Model9-19
Chapter 10: Additional Considerations Regarding Drafting Trusts
  • § 10:1 : Introduction10-3
  • § 10:2 : Administration and Distributions During Grantor’s Life10-3
    • § 10:2.1 : Effect of Grantor’s Incapacity10-3
  • § 10:3 : Recitation Regarding Revocability of Trust10-4
  • § 10:4 : Trust Distributions10-5
    • § 10:4.1 : Current Interests10-5
      • [A] : Traditional (and Related) Approaches10-6
        • [A][1] : Mandatory Distributions10-7
        • [A][2] : Discretionary Distributions10-8
      • [B] : Annuity Trusts and Unitrusts—Overview10-16
        • [B][1] : Annuity Trusts10-17
        • [B][2] : Statutory Unitrusts10-19
        • [B][3] : Sample Unitrust Provision10-19
      • [C] : Limitations on Accumulations of Income10-20
      • [D] : Application of Income and/or Principal10-20
        • [D][1] : Facilitating the Application of Income and/or Principal10-21
    • § 10:4.2 : Remainder Interests10-22
      • [A] : Vested Remainders Versus Contingent Remainders—The Basic Distinction10-22
      • [B] : Remainder to a Class; Importance of Survivorship Language10-24
      • [C] : Future Interests in Trust10-25
      • [D] : Continuing Trusts10-26
    • § 10:4.3 : Provisions Relating to Trusts Holding Retirement Plans10-27
    • § 10:4.4 : Precatory Language10-30
  • § 10:5 : Spendthrift Provisions10-31
    • § 10:5.1 : The Uniform Trust Code (UTC) Approach10-34
  • § 10:6 : Powers of Appointment10-35
    • § 10:6.1 : Tax Considerations in Creating Powers of Appointment10-37
      • [A] : General Powers of Appointment10-38
      • [B] : Non-General, Special, or Limited Powers of Appointment10-40
        • [B][1] : Powers of Withdrawal; “5 and 5” Powers10-41
        • [B][2] : Ascertainable Standards10-42
    • § 10:6.2 : Power to Appoint in Further Trust10-45
    • § 10:6.3 : Sample Language Creating Powers of Appointment10-45
    • § 10:6.4 : Considerations Applicable to the Exercise of Powers of Appointment10-46
      • [A] : Compliance with Conditions10-46
      • [B] : Compliance with the RAP10-48
    • § 10:6.5 : General Powers of Appointment and GST Planning10-49
  • § 10:7 : Classification As a Domestic Trust or a Foreign Trust10-50
  • § 10:8 : Changing Trust Situs10-54
  • § 10:9 : Rule Against Perpetuities (RAP)10-56
    • § 10:9.1 : The Traditional Rule Against Perpetuities: Measuring Lives10-57
    • § 10:9.2 : Diagram Illustrating Dispositions in Trust Under RAP10-59
    • § 10:9.3 : Drafting Mistakes to Avoid Under the Traditional RAP10-60
      • [A] : Traditional RAP Trap: Unborn Widow10-60
      • [B] : Traditional RAP Trap: Administrative Contingencies10-61
    • § 10:9.4 : Wait-and-See and Cy Pres10-61
    • § 10:9.5 : Uniform Statutory Rule Against Perpetuities (USRAP)10-62
    • § 10:9.6 : Interests Subject to RAP10-62
      • [A] : Exclusion of Future Interests Retained by Creator; Future Interests Created in Charities10-63
      • [B] : Inapplicability to Powers in Trust10-63
    • § 10:9.7 : Savings Clauses10-63
    • § 10:9.8 : Rule Against Suspension of Power of Alienation Distinguished10-64
    • § 10:9.9 : Choice of Law10-65
    • § 10:9.10 : Exercise of a Power of Appointment10-65
    • § 10:9.11 : The Rule Against Perpetuities in New York10-67
      • [A] : Prior Law10-67
      • [B] : Current Law10-68
  • § 10:10 : Income Tax Planning and Other Considerations10-68
  • § 10:11 : Trusts to Hold Stock in S Corporations10-69
    • § 10:11.1 : Qualified Subchapter S Trusts (QSSTs)10-70
      • [A] : The Single Current Beneficiary Requirement10-71
      • [B] : The Trust Termination Requirements10-71
      • [C] : The Requirement to Distribute All of the Trust Income10-72
      • [D] : Income Taxation of QSSTs10-72
    • § 10:11.2 : Electing Small Business Trusts (ESBTs)10-73
    • § 10:11.3 : S Stock and Foreign Trusts, Grantors, and Beneficiaries10-75
  • § 10:12 : Support Trusts and Governmental Programs10-75
    • § 10:12.1 : New York Supplemental Needs Trusts10-78
  • § 10:13 : Silent Trusts10-81
  • § 10:14 : Trusts for Pets and Other Related Provisions10-86
    • § 10:14.1 : New York Statute on Trusts for Pets10-89
Chapter 11: Fiduciaries and Administrative Powers
  • § 11:1 : Fiduciary and Other Appointments11-3
    • § 11:1.1 : Selection of Trustees and Executors11-4
      • [A] : Corporate Fiduciaries11-5
    • § 11:1.2 : Formal Qualifications11-5
    • § 11:1.3 : Designation of Successor Fiduciaries; Additional Fiduciaries11-7
    • § 11:1.4 : Resignation and Removal11-10
      • [A] : The Uniform Trust Code (UTC) Approach11-13
      • [B] : Limits on Appointment of Successor to Removed Fiduciary11-14
      • [C] : Situs of Fiduciary11-16
    • § 11:1.5 : Appointing Protectors11-17
      • [A] : Protector Powers and Responsibilities11-17
    • § 11:1.6 : Appointment of Guardians11-19
    • § 11:1.7 : Directed Trustees11-21
      • [A] : Administrative Trustee Sample Language11-23
      • [B] : Investment Trustee Sample Language11-25
      • [C] : Distribution Trustee Sample Language11-29
  • § 11:2 : Bond11-30
  • § 11:3 : Commissions11-31
    • § 11:3.1 : Commissions of More than Two Fiduciaries11-35
      • [A] : Drafting Under the Multiple Commissions Statute11-35
    • § 11:3.2 : Commissions of Corporate Fiduciaries11-36
      • [A] : New York SCPA Section 2312: Commissions of Corporate Trustees11-37
      • [B] : New York SCPA Section 2307: Commissions of Corporate Executors11-37
      • [C] : Clauses Regarding Compensation of Corporate Fiduciaries11-38
    • § 11:3.3 : Attorney-Fiduciaries11-39
      • [A] : Commissions for Attorney-Executor and Employees of Attorney11-40
        • [A][1] : Execution Formalities for Disclosure Agreements11-43
        • [A][2] : When a Disclosure Agreement Is Not Required11-45
    • § 11:3.4 : “Reasonable Compensation” for Individual Fiduciaries11-47
  • § 11:4 : Unanimous or Nonunanimous Decisions and Acts11-48
  • § 11:5 : Administrative Powers of Executors and Trustees11-50
    • § 11:5.1 : Introductory Clause11-52
    • § 11:5.2 : Retention of Assets11-54
    • § 11:5.3 : Investment11-55
      • [A] : Unconventional Investments11-56
      • [B] : Non-Income-Producing Assets in a Marital Trust11-56
      • [C] : Giving Certain Powers Only to Certain Fiduciaries11-57
    • § 11:5.4 : Allowing Corporate Fiduciaries to Invest in Their Own Funds11-57
    • § 11:5.5 : Lending11-58
    • § 11:5.6 : Sale11-58
    • § 11:5.7 : Mortgage, Lease, Repairs11-59
    • § 11:5.8 : Borrowing11-60
    • § 11:5.9 : Renewing Obligations; Settling and Arbitrating Claims11-61
    • § 11:5.10 : Voting Rights, Reorganizations11-61
    • § 11:5.11 : Distribution in Kind11-62
    • § 11:5.12 : Dividends11-63
    • § 11:5.13 : Amortization11-64
    • § 11:5.14 : Consolidated Investments (or Holding Assets In Solido)11-65
    • § 11:5.15 : Services of Others11-65
      • [A] : Unbundling Expenses—Income Tax Deductibility11-67
      • [B] : Additional Considerations Regarding Payment of Legal Fees11-68
    • § 11:5.16 : Accumulations, Powers in Trust11-69
    • § 11:5.17 : Authority After Trusts Terminate11-69
    • § 11:5.18 : Simplified Administrative Provisions11-70
  • § 11:6 : Power to Make Tax Elections11-71
  • § 11:7 : Powers Related to Digital Assets11-73
    • § 11:7.1 : Pending Model Rules11-75
  • § 11:8 : Investment Standards for Fiduciaries11-75
    • § 11:8.1 : Evolution of Trustee Investment Standard Through 197011-75
    • § 11:8.2 : Prudent Person Rule (1970 Through 1992)11-76
    • § 11:8.3 : Uniform Prudent Investor Act (UPIA)—1992 to Date11-77
      • [A] : Standard of Conduct11-78
      • [B] : Specific Fiduciary Duties11-81
      • [C] : Invasions; Income and Principal and the Power to Adjust11-83
      • [D] : Annuities and Unitrusts11-85
      • [E] : The Fiduciary’s Duty to Diversify Assets11-89
        • [E][1] : The Balance Between the Duty to Diversify and the Wishes of the Testator or Settlor11-89
        • [E][2] : Diversification and Market Pressures11-93
        • [E][3] : Diversification and Hindsight Liability11-95
        • [E][4] : Circumventing Diversification Requirements11-95
      • [F] : Retention of Initial Portfolio11-99
      • [G] : Additional Powers Under the UPIA11-99
      • [H] : Delegation of Investment and Management Functions11-100
      • [I] : Considerations Regarding Waiver of Prudent Person Rule/UPIA and Allowance of Self-Dealing11-103
    • § 11:8.4 : The Final “Income” Tax Regulations and Total Return Legislation11-105
      • [A] : The Tax Questions the Income Regulations Were Intended to Address11-106
      • [B] : The Effective Dates for the Income Regulations11-107
      • [C] : How the Income Regulations Address the Tax Issues11-107
        • [C][1] : Definition of “Income”11-107
        • [C][2] : Mandatory Versus Permissive Statutes11-108
        • [C][3] : Capital Gains and Distributable Net Income11-109
        • [C][4] : Marital Deduction Trusts11-110
        • [C][5] : Grandfathered GST Tax-Exempt Trusts11-110
        • [C][6] : Charitable Remainder Trusts11-111
        • [C][7] : Pooled Income Funds11-112
      • [D] : Open Issues11-112
    • § 11:8.5 : Taxation of Net Investment Income Under the Health Care and Education Reconciliation Act11-113
  • § 11:9 : Granting Trustees Limited Powers of Amendment11-113
  • § 11:10 : Special Provisions Applicable to Closely Held Businesses11-114
  • § 11:11 : Savings Clauses—Limitations on Fiduciary Powers11-117
  • § 11:12 : Duties of Executors and Trustees11-118
  • § 11:13 : Fiduciary Liability and Exculpatory Clauses11-121
    • § 11:13.1 : Exculpatory Clauses11-121
    • § 11:13.2 : Indemnification11-123
    • § 11:13.3 : Duty to Inform11-124
      • [A] : The UTC Approach11-125
    • § 11:13.4 : Obligation to Account11-126
    • § 11:13.5 : Liability of Successor Fiduciaries11-128
Chapter 12: Other Administrative Clauses
  • § 12:1 : Common Disaster or Simultaneous Death12-1
  • § 12:2 : In Terrorem Clauses12-7
    • § 12:2.1 : Other Limitations on In Terrorem Clauses12-10
  • § 12:3 : Arbitration and Mediation Clauses12-11
  • § 12:4 : Transfers to Minors12-15
    • § 12:4.1 : Uniform Gifts to Minors Act and Uniform Transfers to Minors Act12-15
      • [A] : Age at Which Custodianship Terminates12-16
      • [B] : Territorial Application12-17
      • [C] : Investment Standard12-17
      • [D] : Tax Considerations12-18
      • [E] : Compensation12-19
    • § 12:4.2 : Power in Trust Distinguished from Trust12-19
  • § 12:5 : Contingent Disposition12-23
  • § 12:6 : Funeral and Burial Directions and Related Considerations12-24
    • § 12:6.1 : Funeral and Burial Directions12-24
    • § 12:6.2 : Disposition of Cemetery Plots12-25
  • § 12:7 : Payment of Debts and Expenses12-25
    • § 12:7.1 : Debts12-25
    • § 12:7.2 : Funeral Expenses12-26
    • § 12:7.3 : Allocation of Expenses12-26
  • § 12:8 : Definitions12-27
  • § 12:9 : Direction Governing Jurisdiction Where Will Is to Be Probated12-27
Chapter 13: Execution of Wills and Trusts and Procedural Considerations
  • § 13:1 : Will Execution13-2
    • § 13:1.1 : Execution Pages/Provisions13-2
      • [A] : Testimonium Clause13-3
      • [B] : Attestation Clause13-3
      • [C] : Affidavit of Attesting Witnesses13-5
      • [D] : Testator’s Written Acknowledgment of Disclosure13-5
    • § 13:1.2 : Process of Completing and Signing the Will13-6
      • [A] : Selection of Witnesses13-8
      • [B] : Will Execution Ceremony13-11
    • § 13:1.3 : Choice of Law13-13
    • § 13:1.4 : Revocation of Previous Wills13-14
    • § 13:1.5 : Will Execution Requirements Under UPC13-15
    • § 13:1.6 : Electronic Will Execution13-15
  • § 13:2 : Execution of Trusts13-16
    • § 13:2.1 : Preliminary Considerations—Inter Vivos Trusts13-16
      • [A] : Revocability13-16
      • [B] : Unilateral or Bilateral13-17
      • [C] : Number of Trust Instruments13-18
    • § 13:2.2 : Trust Situs/Choice of Law13-18
      • [A] : Selected Favorable Attributes of Trust-Friendly Jurisdictions13-20
        • [A][1] : State-Level Income Tax Savings13-21
        • [A][2] : Enhanced Creditor Protection13-23
        • [A][3] : Bifurcation of Duties13-25
    • § 13:2.3 : Execution Formalities13-25
    • § 13:2.4 : Funding—During Life and at Death13-26
    • § 13:2.5 : The Uniform Trust Code (UTC) Approach13-27
  • § 13:3 : Fraud, Duress, and Undue Influence During the Preparation and Execution Process13-28
  • § 13:4 : Holographic Wills, Forms, and Computer-Assisted Drafting13-32
    • § 13:4.1 : Holographic Wills13-32
    • § 13:4.2 : Pre-Printed Forms13-32
    • § 13:4.3 : Computer-Assisted Drafting13-33
  • § 13:5 : Joint or Reciprocal Documents13-34
    • § 13:5.1 : Joint Wills13-34
    • § 13:5.2 : Joint Trusts13-35
    • § 13:5.3 : Mirror-Image Wills or Trusts13-36
      • [A] : Mirror-Image Documents: Ongoing Litigation13-37
  • § 13:6 : Safekeeping of Executed Estate Planning Documents13-39
  • § 13:7 : Review and Revision of Estate Planning Documents13-41
    • § 13:7.1 : Codicil or New Will?13-43
    • § 13:7.2 : Trust Amendment or Restatement?13-44
  • § 13:8 : Revocation and Reformation13-45
    • § 13:8.1 : Revocation of Prior Wills13-45
    • § 13:8.2 : Revocation of Trusts13-46
    • § 13:8.3 : Reformation of Wills and Trusts13-47
    • § 13:8.4 : Potential Tax Concerns Specific to Trust Reformation or Revocation13-50
  • § 13:9 : Trust Decanting13-50
    • § 13:9.1 : New York Decanting Statute13-53
    • § 13:9.2 : The Uniform Trust Decanting Act (UTDA)13-56
    • § 13:9.3 : Model Pourover/Decanting Language13-56
Chapter 14: Lifetime Irrevocable Trusts
  • § 14:1 : Considerations Regarding Inter Vivos Trusts14-2
    • § 14:1.1 : Need for Coordinated Estate Plan14-3
    • § 14:1.2 : Impact on Available Tax Exemptions at Death14-4
    • § 14:1.3 : Adjustment Clauses14-4
  • § 14:2 : Grantor Trusts14-8
    • § 14:2.1 : Background on Grantor Trust Rules14-8
      • [A] : A Word on Nomenclature14-8
    • § 14:2.2 : Uses of Intentionally Defective Grantor Trusts (IDGTs)14-9
    • § 14:2.3 : Methods of Creating Grantor Trust Status14-11
      • [A] : Statement of Intent to Be Treated As a Grantor Trust14-11
      • [B] : Power of Disposition by Nonadverse Party14-11
      • [C] : Power to Add Beneficiaries14-12
      • [D] : Administrative Powers—Power to Substitute Property14-13
      • [E] : Power to Lend14-15
      • [F] : Power or Interests of the Grantor’s Spouse14-15
    • § 14:2.4 : Grantor Trusts for Foreign Grantors14-15
    • § 14:2.5 : Grantor Trust Exit Strategy14-16
    • § 14:2.6 : Beneficiary As Owner for Grantor Trust Purposes14-17
    • § 14:2.7 : Impact of Change of Grantor Trust Status14-18
    • § 14:2.8 : Payment of Taxes and the Right of Reimbursement14-20
  • § 14:3 : Crummey Power Trusts14-23
    • § 14:3.1 : Who May Hold the Power14-24
    • § 14:3.2 : What Triggers the Crummey Power?14-25
    • § 14:3.3 : Creation of Power14-25
    • § 14:3.4 : How Large Should the Power of Withdrawal Be?14-26
    • § 14:3.5 : Lapse of the Power14-28
    • § 14:3.6 : Hanging Powers14-30
    • § 14:3.7 : GST Issue14-31
    • § 14:3.8 : Notice14-31
    • § 14:3.9 : Minors and Incapacitated Persons14-32
    • § 14:3.10 : Modification of Crummey Powers14-33
    • § 14:3.11 : Restrictions on Other Distributions14-34
    • § 14:3.12 : Sample Withdrawal Powers—Composite Model14-35
  • § 14:4 : Dynasty Trusts14-37
  • § 14:5 : Community Property Trusts14-38
  • § 14:6 : Charitable Trusts14-39
  • § 14:7 : Self-Settled Asset Protection Trusts14-40
    • § 14:7.1 : Tax Planning and Asset Protection Trusts14-42
  • § 14:8 : Insurance Trusts14-43
    • § 14:8.1 : Impact of Death Within Three Years of Transfer of a Policy to the Trust14-50
  • § 14:9 : Qualified Personal Residence Trusts (QPRTs)14-50
  • § 14:10 : Grantor Retained Annuity Trusts (GRATs)14-55
    • § 14:10.1 : Two-Life GRAT Annuities14-56
    • § 14:10.2 : Additional GRAT Details14-58
    • § 14:10.3 : GRAT Comparison to Sale to Intentionally Defective Grantor Trust14-61
  • § 14:11 : 2503(c)(3) Trusts14-63
    • § 14:11.1 : Alternative Vehicles for Holding Property for Minors14-64
  • § 14:12 : Grantor Retained Interest Step-Up Trusts (GRISUTs)14-65
Chapter 15: Other Estate Planning Documents
  • § 15:1 : General Considerations15-2
  • § 15:2 : Will Substitutes15-2
    • § 15:2.1 : Life Insurance and Retirement Plans15-3
    • § 15:2.2 : Joint Property15-4
    • § 15:2.3 : Bank Accounts and Securities15-6
      • [A] : Bank Accounts15-6
      • [B] : Securities15-8
    • § 15:2.4 : Tax Considerations15-9
  • § 15:3 : Durable Powers of Attorney15-10
    • § 15:3.1 : Varieties of Powers of Attorney15-12
    • § 15:3.2 : Power of Attorney Statutes15-14
      • [A] : New York Power of Attorney Statute15-14
        • [A][1] : New York Statutory Short-Form Power of Attorney15-16
          • [A][1][a] : Modifications Section15-18
        • [A][2] : Fiduciary Duties of Agent15-19
        • [A][3] : HIPAA Privacy Rule15-19
        • [A][4] : Reasonable Refusal of Power of Attorney15-19
      • [B] : Connecticut Power of Attorney Statute15-20
    • § 15:3.3 : Special Powers: Making Gifts and Amending Trusts15-20
      • [A] : Gifts Under Durable Power15-20
      • [B] : Creating or Amending Trusts15-24
    • § 15:3.4 : Execution and Other Considerations15-25
  • § 15:4 : The Living Will and Health Care Proxy15-28
    • § 15:4.1 : The Living Will15-32
      • [A] : Physician Orders for Life-Sustaining Treatment15-35
    • § 15:4.2 : The Health Care Proxy15-35
      • [A] : Choice of Health Care Agent15-38
      • [B] : Providing Instructions for the Health Care Agent15-38
      • [C] : Naming a Conservator or Guardian15-40
      • [D] : HIPAA15-41
    • § 15:4.3 : Medical Decisions in the Absence of Living Will or Health Care Proxy15-42
  • § 15:5 : Disposition of Organs and Remains15-44
  • § 15:6 : Standby Guardians for Minors15-46
    • § 15:6.1 : Standby Guardian Sample Language15-48
  • § 15:7 : Religious Estate Planning Documents15-49
Chapter 16: Certain Ethical Considerations and Potential Claims Against Attorneys
  • § 16:1 : Introduction16-2
    • § 16:1.1 : Reasons for Concern16-2
  • § 16:2 : Factors to Consider When Undertaking Representation16-3
    • § 16:2.1 : Degree of Expertise Required16-4
    • § 16:2.2 : Availability of Relevant Facts16-4
    • § 16:2.3 : Dealing with Questionably Competent Clients16-5
  • § 16:3 : Ethical Duties16-6
    • § 16:3.1 : Conflicts of Interest in Estate Planning and Administration16-7
      • [A] : Lawyer As Beneficiary or Fiduciary16-8
      • [B] : Potential Conflicts of Interest Between Clients16-8
        • [B][1] : Spouses16-9
        • [B][2] : Beneficiary and Testator16-11
        • [B][3] : Beneficiary and Fiduciary16-12
      • [C] : Lawyer As Intermediary16-13
    • § 16:3.2 : Letters of Engagement16-14
    • § 16:3.3 : Other Ethical Issues16-15
      • [A] : Dormant Representation16-15
        • [A][1] : The “Disengagement” Letter16-16
  • § 16:4 : Legal Duties and Malpractice16-16
    • § 16:4.1 : Privity: The Historic Barrier to Malpractice Liability16-17
      • [A] : New York Approach16-20
  • § 16:5 : Drafting Defects16-21
    • § 16:5.1 : Errors in Transcription16-22
    • § 16:5.2 : Ambiguities16-23
    • § 16:5.3 : Tax Problems16-25
    • § 16:5.4 : Unanticipated Changes in Facts16-26
    • § 16:5.5 : Construction and Reformation As Remedies16-27
  • § 16:6 : Execution Errors16-28
    • § 16:6.1 : Types of Errors16-28
      • [A] : Signing Errors16-29
      • [B] : Number and Qualifications of Witnesses16-31
      • [C] : Other Execution Errors16-33
    • § 16:6.2 : Assessing the Risk of Malpractice16-34
  • § 16:7 : Claims Based on Common Law Doctrines Affecting Validity of an Instrument16-36
    • § 16:7.1 : Testamentary Capacity16-37
    • § 16:7.2 : Undue Influence16-39
    • § 16:7.3 : Fraud16-40
    • § 16:7.4 : Interference with an Expectancy of Inheritance16-40
  • § 16:8 : Protective Measures to Avoid Malpractice Liability16-41
  Appendices
Appendix A: Simple Will (Without Trusts)
Appendix B: Pour-Over Will
Appendix C: Complex Will (with Trusts)
Appendix D: Self-Proving Affidavits for Witnesses upon Execution of Will
Appendix E: Codicil
Appendix F: Model Disclosure Agreement for SCPA Section 2307-a in New York
Appendix G: Revocable Trust
Appendix H: Qualified Personal Residence Trust (QPRT)
Appendix I: Grantor Retained Annuity Trust (GRAT) Provisions
Appendix J: Power of Attorney—New York Statutory Short Form
Appendix K: New York Statutory Gifts Rider—Authorization for Certain Gift Transactions
Appendix L: Combined Health Care Proxy and Medical Directive
Appendix M: Medical Directive (No Health Care Proxy)
Appendix N: Health Care Proxy (No Medical Directive)
Appendix O: New York State Department of Health, Health Care Proxy Instructions, Explanations, and Form
Appendix P: The Medical Directive (and Health Care Proxy) Developed by Dr. Linda L. Emanuel and Dr. Ezekiel J. Emanuel
Appendix Q: The Halachic Living Will (Including Proxy)
Appendix R: New Jersey Proxy Directive—(Durable Power of Attorney for Health Care) Designation of Health Care Representative
Appendix S: New Jersey Combined Advance Directive for Health Care
Appendix T: New Jersey Instruction Directive (Without Proxy)
Appendix U: Connecticut Form Concerning Health Care and Withholding or Withdrawal of Life Support Systems
Appendix V: Connecticut Health Care Instructions Form
Appendix W: Florida Living Will
Appendix X: Florida Designation of Health Care Surrogate
Appendix Y: Illinois Declaration Regarding Health Care
Appendix Z: Illinois Statutory Short Form Power of Attorney for Health Care
Appendix AA: California Advance Health Care Directive
Appendix BB: Georgia Advance Directive for Health Care
Appendix CC: New York Appointment of Agent to Control Disposition of Remains
  Tables of Authorities
  Index

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