DO YOU REALLY WANT TO MAKE YOUR CHILDRENS’ AND GRANDCHILDRENS’ INHERITANCE CONDITIONAL ON THEM DOING THINGS YOUR WAY?
In thirty years as a lawyer, I have had very few estate planning clients suggest conditioning gifts to their progeny on the kinds of restriction described in a recent Wall Street Journal article, excerpted and linked at the Taxprof Blog. I can’t recall a client ever even suggesting that a gift should be conditioned on marrying within the family’s faith tradition, for example. I agree that those kinds of conditions can have detrimental unintended effects.
When a client suggests that gifts should be conditioned on specific future events or activities, I typically simply point out that it’s impossible to predict the future, and equally impossible to even know what circumstances might exist at the future time when those conditions will have to be applied. Usually, the client will agree that they don’t want to put the person who would have to enforce those conditions in what might be an untenable position.
My motto is: keep it simple.
Probate is the process of changing the ownership of the assets of someone who has died. That’s how I describe probate (better referred to, in my opinion, as estate administration) when I am explaining it to clients, and that’s really what it’s about.
The message that estate administration is best avoided has been hammered so relentlessly by some purveyors of estate planning services that many consumers are, perhaps unnecessarily, biased against it. They don’t necessarily know what probate is, but they know they don’t want it.
My Estate Planning Law Report for October is an effort to clear up some of the myths, and give my loyal readers better information, about estate administration so that they can make informed decisions when planning their estates.
The Report is posted now in the News & Events section of deconcinimcdonald.com. If you’d like to be added to my mailing list so that you’ll receive my newsletter directly every month, use the “subscribe to newsletter” button below, or send me an email from the link on the home page of this web site.
MAKING TAX RETURN FILING SIMPLE AND FREE FOR MOST TAXPAYERS IS A WORTHY OBJECTIVE, THE QUESTION IS HOW TO GET THERE
A public interest group thinks that it’s the fault of Intuit that tax filing isn’t simple and free for most taxpayers. You know who Intuit is: they make Turbo Tax, the most popular tax preparation software. The public interest group says that Intuit has lobbied vigorously against measures that would have by now made it unnecessary for taxpayers to pay for Turbo Tax, or any other tax preparation software.
I don’t doubt that a company with as big a stake in tax preparation as Intuit apparently has would lobby against the government replacing their product with its own. But, as I have said before, tax return preparation isn’t complex and expensive because of Intuit. Tax preparation is complex and expensive because the tax code is complex.
Another factor here that makes me less inclined to blame Intuit is that I get advertising all the time about Turbo Tax and competing products offering free filing for simple tax returns, and the government does have its own Free File service.
And one more thing (I’m not defending Intuit, really I’m not): when was the last time that the government made anything having to do with taxes, or anything else, simple?
I’M NOT INTERESTED IN INVESTING IN AN ENTERPRISE THAT DOESN’T CONSIDER THE RETURN ON MY CAPITAL TO BE ITS FIRST PRIORITY
If I invest in a company, I’m an owner. Why would I, or any other owner, countenance that company being managed in any way other than placing a return on my capital at the top of its priority list?
What I’m talking about is simply the fiduciary duty that company managers have to company owners (stockholders). This quote neatly summarizes the problem with CEOs pledging to prioritize the interests of “stakeholders” other than stockholders:
Capitalism is not named after the managers; it is named after the providers of capital, the shareholders. Its foundation is the strict and scrupulous fiduciary obligation (“the punctilio of an honor the most sensitive,” as Justice Benjamin Cardozo said in Meinhard v. Salmon), that gives credibility to capitalism by addressing the agency cost risk of entrusting money to others. Why should investors entrust their money to people who want to turn the fiduciary duty of strict loyalty into some version of “just trust me?”
EMPLOYEE/USER-OWNED BUSINESSES ALREADY EXIST, THERE’S NO GOOD REASON TO FORCE EXISTING COMPANIES TO ADOPT THOSE STRUCTURES
Cooperative associations and mutual companies are business organizations that are owned by their own employees or customers (users). There’s a good chance that you already participate in a mutual company through your insurance, as many insurance companies are mutual companies.
Since these types of business organizations already exist and are free to compete in the marketplace with investor-owned corporations, there is no compelling reason to force existing investor-owned corporations to give stock to their employees, or to force them to put employees on their boards of directors. I’m not sure what the proponents of such measures think they would accomplish, but I am sure that one of the results would be to make companies that are forced to take those measures less profitable and less able to provide good compensation to their employees.
ANOTHER ILLUSTRATION OF THE FREE SPEECH PRINCIPLE THAT THE GOVERNMENT CANNOT DISCRIMINATE BASED ON VIEWPOINT
Tax exemptions are another example of an area where the government can’t discriminate because viewpoints expressed by some exemption recipients may be disfavored. To put it another way, if the government grants a tax exemption to a particular category of entity, the government cannot then deny that exemption to entities that are within the category but that express views that are objectionable. Even if those views are, for example, racist.
For an excellent discourse on the application of free speech jurisprudence to the granting of tax exemptions, I encourage you to read the recent testimony on the subject by Eugene Volokh before the Oversight Committee of the House Ways & Means Committee. He does a great job of explaining why it’s so important that free speech principles be applied correctly in tax administration.
The Maricopa County Assessor has been in the news because he has been indicted for allegedly running an illegal adoption business. I don’t have an opinion on the merits of the charges against him. I can tell you that his alleged crimes have nothing to do with the office to which he was elected. In fact, he was allegedly running the business before he was elected.
What is function of the office to which he was elected, county assessor? The function of the county assessor is to determine the value of all property in the county for tax purposes. That’s essentially it.
Why would someone who is running an allegedly illegal and lucrative business that has nothing to do with property run for the job of county assessor? I have no idea.
At what point does government red tape become so onerous that it amounts to a taking of private property for which the property owner must be compensated under the Fifth Amendment? That has been a much-discussed question for some time now. I know that some people say the answer is never, but there are indications that the courts may be heading in the other direction.
Two recent cases are illustrative. One is a decision that allows local governments to be sued in state court when a property owner claims that regulations amount to a taking. The other is a California case involving the imposition of historical review requirements after the property owner was allowed to demolish the purportedly historic building on his property.
NOW I KNOW WHY RANDY CALIFORNIA’S CLAIM OF COPYRIGHT INFRINGEMENT WASN’T BARRED BY THE STATUTE OF LIMITATIONS
The answer is in an article discussing the current status of the case. The case is still going on. Randy California’s estate appealed the jury verdict against it, a three-judge panel of the Ninth Circuit Court of Appeals reversed the jury verdict, and the panel decision is now up for review by the full Ninth Circuit.
What is the answer? The owner of the performance rights to Stairway to Heaven still collects royalties for every performance of the song, and each time they do, they allegedly violate Randy California’s copyright again. As long as people keep broadcasting or purchasing copies of the Led Zeppelin song, the claim that it infringes Randy California’s copyright will still be alive (well, I guess whoever owns the performance rights to Stairway to Heaven could give up those rights, but we know that’s not going to happen, and it will probably be a long time before people finally stop broadcasting or purchasing copies of it).
So, now I can explain why that claim for copyright infringement wasn't barred by the statute of limitations, even though the allegedly infringing song was released in 1971.
If you’re unsure of how to deal with digital assets in your estate plan, my new Estate Planning Law Report might give you a place to start. It’s about the Revised Uniform Fiduciary Access to Digital Assets Act (the “RUFADAA” for you acronym mavens).
My Estate Planning Law Report, both the current and past issues, along with my Real Estate Law Updates and Tax Law Special Reports, are available for your perusal in the news and events section of deconcinimcdonald.com.
The contents of this blog, this web site, and any writings by me that are linked here, are all my personal commentary. None of it is intended to be legal advice for your situation.