Category: Trust Administration

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Estate Administration Estate Planning Estate Tax Litigation Probate Surrogate’s Court Practice Trust Administration

What Happens to Nick Reiner’s Inheritance?

Sean R. Weissbart —

Sean Weissbart's headshot photo

I recently sat down with People Magazine, Entertainment Tonight, WGN Radio, and ABC Eyewitness News to answer this question: What happens to Nick Reiner’s inheritance? California has a “Slayer Statute” that deprives a murderer of inheriting under a Will or Trust created by their victim. If Nick Reiner is convicted of the crime he has been charged of—two counts of first-degree murder related to the death of his parents, Rob and Michele Reiner—he will be treated as predeceasing both of his parents and cut out of their estate. He’ll also be ineligible to serve as an Executor or Trustee.

What would happen to Nick’s share of the inheritance? Neither Rob’s nor Michele’s estate planning documents are publicly available, but the most likely outcome is that Nick’s siblings will receive his share of the estate. Rob had an adopted daughter (the biological child of his first wife) in addition to the two children (other than Nick) that he shared with Michele, so if Nick is cut out, the estate would likely be divided two or three ways.

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Accounting Estate Administration Litigation Surrogate’s Court Practice Trust Administration

New York Compulsory Accounting Proceedings—A Valuable Tool to Provide Transparency or a Means to Extort a Settlement

Kyle G. Durante —

Most states provide a mechanism by which a beneficiary or other person interested in a trust or an estate may petition a Court asking the Court to order a fiduciary to account for his, her, or its actions and proceedings. This process is intended to provide the beneficiary with sufficient transparency regarding the fiduciary’s actions typically when the fiduciary has failed to provide such information to the beneficiary upon request. However, this process is often abused by aggrieved individuals (whether or not such grievance is legitimate) in an effort to extort a settlement. Courts must act as gatekeepers to limit the misuse of these types of proceedings.

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Estate Planning Gift Tax Trust Administration

Is CCA 202352018 the Death of Irrevocable Trust Decantings?

Kyle G. Durante —

For years, practitioners have freely used irrevocable trust decantings as a means to make various changes to irrevocable trusts without concern of giving rise to gift tax consequences. However, the Internal Revenue Service’s (“IRS”) Chief Counsel Advice Memorandum (CCA 202352018) (the “CCA”) may be the death to irrevocable trust decantings as we know them.

The term “irrevocable trust” is somewhat of a misnomer—there are mechanisms by which irrevocable trusts can be modified in certain respects. Generally, irrevocable trusts can be modified in one of two ways depending on applicable state law: (i) some states, such as New Jersey, Pennsylvania, and Connecticut, permit an irrevocable trust to be modified with the consent of the beneficiaries and the trustee (some states also require the consent of the settlor if he or she is then living), which is typically referred to as a “non-judicial modification;” and (ii) some states, such as New York, Delaware, and Florida, permit an irrevocable trust to be modified by a decanting, which is a process by which an authorized trustee exercises his or her independent discretion to pay over the property of the trust to a new trust that has different terms.

For years, practitioners have been concerned that using a non-judicial modification to make certain changes with the consent of the beneficiaries (such as removing a beneficiary, shifting beneficial interests, or diluting a beneficiary’s interest), may be deemed to be a taxable gift by the beneficiaries. However, this concern was not present with respect to decantings since a decanting is effectuated by the independent act of an authorized trustee, who does not have a beneficial interest in the trust, without the consent of the beneficiaries. That was, until the CCA.

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