Category Archives: Uncategorized

CARES Act suspends 2020 RMDs

Dear Clients, Colleagues and Friends:

We hope you and your family are staying safe and taking care during this difficult time.  As you know, we are working remotely.  We are all still available during regular business hours and eager to help you.

We are sending this newsletter because one of the provisions of the recently enacted CARES Act directly impacts many of our clients.  The CARES Act changed the rules for required minimum distributions (RMDs) from retirement plans for 2020.

  • All RMDs from retirement plans (including IRAs, inherited IRAs, and employer plans, such as 401Ks) for 2020 are suspended.
  • If you are over 70 ½ or you are the beneficiary of an inherited IRA and you have not taken all of your RMDs for 2020 and do not wish to take the remaining RMDs, you do not have to do so. 
  • If you have taken RMDs, you may be able to roll them back into the plan if it is within 60 days of the distribution or, if it is more than 60 days, you may be able to contribute the distribution to an IRA. 
  • If you are under 59 ½ you may be able to take a penalty-free distribution or loan from your retirement plan, up to $100,000.  Generally, there is a 10% penalty for distributions before age 59 ½.  Income taxes on the distribution will still be due.

You should consult your financial advisor about your specific situation.  If your RMDs are distributed automatically, you may wish to reach out to your financial advisor to delay the distributions.

We understand this is a time of great anxiety.  We wish you continued good health and prosperity in the months to come.

Yours truly,

Dale Kaiser

Rachel Ziegler

Davina Lewis

My #SocialDistancing Movie Binge List – with a twist of Estate Planning

Good TV and movies may be the key to survival in the coming weeks. Add these great movies – with Estate Planning themes – to your #SocialDistancing binge list.

Knives Out – This new release ensemble film is an Agatha Christie style murder mystery with an Estate Planning twist.  Novelist Harlan Thrombey is found dead in his Massachusetts mansion.  His extended family members are all suspects.  When the family finds out Harlan recently amended his Estate Plan to leave his mansion and $60 million fortune to his young Lantinx private nurse, the quest for his killer gets even more interesting.   I found the meeting with the exasperated Estate Planning attorney laugh-out-loud funny.  Who doesn’t love those clients that require detailed explanations of testamentary capacity, undue influence, and the Slayer statute? 

Brewster’s Millions – This one is an oldie but goodie!  Monty Brewster (played by Richard Pryor, at the height of his career) is a struggling minor league baseball player who learns his recently deceased uncle left him a $300 million fortune.  But Uncle Rupert was no dope, and like most of us, he worried about Monty’s spending habits.  So the inheritance comes with a contingency.  Monty has a choice – he can forego the fortune in exchange for $1 million outright OR he can spend 30 days spending $30 million of it and, if successful, get the entire remainder of the $300 million.  The hitch, however, is that he can’t own any assets at the end of the 30 days. Uncle Rupert hopes to teach Monty to hate wasteful spending.  Monty accepts the challenge. 

Rain Man – After his father dies, luxury car dealer Charlie Babbitt (played by Tom Cruise) learns that the bulk of dad’s estate has been left to a special needs trust for the benefit of Charlie’s autistic brother, Raymond (played by Dustin Hoffman), who Charlie never knew.  Charlie travels to meet Raymond with the hope of getting his half of the fortune.  An ensuing road trip results in the brothers’ bonding, and Charlie gives up his plan to contest the Will.   

Willy Wonka and the Chocolate Factory – Yes, you read correctly!  Willy Wonka has a wildly successful candy business, but he is nearing the end of his career and has no heirs to carry it on.  His golden ticket scheme is his attempt at a business succession plan.  It’s not a plan I typically recommend to clients, but the legal work to transition the business to Charlie would be interesting.  

image from flickr @wonderlane

Larry David and “Curb” take on Estate Planning

If you need a break from talk of the coronavirus, stock market crash, and politics, I highly recommend Season 10 of Larry David’s Curb Your Enthusiasm.  Once you get past cringing at Larry’s social fumbles, it’s great entertainment.   As he always has, in Season 10, Larry takes on the problems and annoyances of everyday life in a laugh-out-loud way.  In fact, the most recent episode (Season 10, Episode 8) includes an Estate Planning storyline. 

Here is what happens.  Larry and Cheryl meet up at Jeff’s house.  Cheryl tells Larry that her sister, Becky, is selling the house Larry and Cheryl gifted to her fifteen years ago.  Becky is Cheryl’s down-on-her-luck sister – a self-dubbed “Princess Margaret” to Cheryl’s “Queen Elizabeth”.   When Larry finds out Becky is selling the house at a profit, he gets annoyed.  He tells Cheryl the profit should be his.  He then goes directly to Becky and proposes another solution – he’ll recoup his investment from the sale proceeds, and she can keep the profit. 

All three women (Cheryl, Becky and Susie) argue that Larry did not retain the right to keep the profit or recoup his initial investment.  “You gave it to her.  It was a gift,” says Susie, brashly. The women argue with Larry on principle, but they are also right under Estate Planning law.

Presumably, Larry and Cheryl filed a gift tax return when they gifted the house to Becky.  They made a completed taxable gift and deeded the house to her (or perhaps to a trust for her benefit).  Larry can’t take back the gift, or any part of it, including the profit.  Larry can’t have retained an interest in the house.  If he had retained an interest, the gift would be incomplete.  Furthermore, under Section 2036 of the Internal Revenue Code, the full value of the house would be includible in Larry’s estate on his death and subject to federal estate taxes.  (California does not have a state estate tax, although many states, including Massachusetts, still do.)  Because Larry has a very large estate, inclusion of the full value of the house in his estate would be a bad result.  That’s not “pretty, pretty good”.

For those with substantial estates, making gifts to family members is an important estate planning strategy.  We can advise you about the best way to make gifts and minimize estate taxes.

Ever wondered how an Estate Planning attorney advises her own parents?

Stamped: “June 29, 1912”

I’m sharing a real email I sent my Dad recently.  He sought my advice about how best to prepare a list of his financial information so I would have it if he died or became disabled.  This is right up my alley, so I happily complied and now want to share.

First, some background on my family.  Dad is a retired physician.  He is in his early 70s, healthy, responsible, and fully capable.  Mom died many years ago and Dad is unmarried but in a long-term relationship.  I have one brother.  He and I are responsible, close, and similarly situated.    

Like most dads, mine does not like to take advice from his children.   (The fear of dying on an extended European cruise seems to have led him to go against his better judgment!)   Listing financial information, and keeping the list up-to-date, is not an easy task for any of us.  Discussing the process with family members can be difficult too.  Hopefully, my email outline will help your family.

Dad –

I suggest you make a list of your financial information and try to keep it current.  It can be in an Excel spreadsheet, Word document, or even just handwritten.  Since keeping track of information can be burdensome over time, keep it simple.  I would maintain an electronic AND a hard copy of the list somewhere where we would look if you died or lost capacity.  It shouldn’t be locked in a safe or safe deposit box.  I encourage you to continue to get paper statements for all accounts, including all credit cards and bills. 

Here is what you should put on the list.  I am making some assumptions about what you own, so please add to this if I am missing any unusual assets.


List all Bank, Brokerage, Non-Retirement Investment, Pensions and Retirement accounts.  For each account list the following 4 things: (1) The name of the Institution/Bank; (2) The account number; (3) How the account is titled.  Is it in your individual name?  Is it in the name of a Trust?  Is it owned jointly with someone else? (4) If the account has a beneficiary, who is it?

Be sure to include on the list any accounts titled in the name of Mom’s Trust.

List all Life Insurance Policies.  For each policy list the following 5 things: (1) The name of the life insurance company; (2) The policy number; (3) Who owns the policy.  Is it owned by you or by a Trust? (4) Who is the beneficiary? (5) The location of the policy, if you have it.

List any important additional information about your assets, including a safe deposit box, tangible items or stock certificates stored elsewhere, and the title to your car.  Please list the item, location and information needed to access it.


List all Mortgages, HELOCs, and Car loans.  For each account list the following 2 things: (1) The name of the Lender; and (2) The account number

List all Credit cards.  For each card list the following 3 things: (1) Name of the credit card company; (2) The account number; (3) Is the amount due paid automatically? 


List your Medicare Number.  List your Supplemental (Medigap) Health Plan and Member Number.  List your Long Term Care Insurance carrier and Account Number.  Where is the LTC insurance policy located? List name and contact info of Primary Care Physician. 


List name and contact info of Estate Planning Attorney and location of original Estate Plan documents.  List name and contact info of Accountant.  List name and contact info of Financial Advisor.


Try your best to keep a list of usernames and passwords for your online accounts.  This should include bank/investment accounts you manage online, credit cards, email accounts, photo accounts, service/shopping accounts (like Amazon, Netflix, etc.), and social media accounts (like Facebook).  Do your best on this!  It is hard to keep up to date.  I struggle with this too.  I don’t think it is essential (or even possible) for it to be perfect.  If you have a Master Password for Phone or Computers, be sure to put that on the List.   


Estate Planning on the Streets of Philadelphia

I discovered a hidden historical gem on the streets of Philadelphia this week.  13th Street, right in downtown Philadelphia, has been re-named in honor of Philly native and local hero Edith “Edie” Windsor.  Edie Windsor was a LGBT civil rights activist.  After her wife Thea died in 2009, Windsor, as Executor and beneficiary of Thea’s estate, was required to pay $363,000 in federal estate taxes on the assets she inherited.  Had Windsor been married to a man, the assets would have passed to Windsor completely estate tax free because they would have qualified for the unlimited Federal estate tax marital deduction.   Windsor could not benefit from the unlimited marital deduction even though she and Thea were legally married under state law because the Defense of Marriage Act (DOMA) limited marriage to a union between a man and a woman.  DOMA prevented same-sex married couples from receiving federal benefits available to heterosexual married couples.

Windsor sued the federal government alleging that DOMA was unconstitutional.  She asked the court to order the IRS to extend the estate tax marital deduction to same-sex married couples and refund her the estate taxes.

In 2013, the Supreme Court agreed with Windsor.  The court found that DOMA was unconstitutional.  It held that assets left after death to a same-sex spouse are eligible for the federal marital deduction and should not be subject to estate tax.  Windsor was entitled to an estate tax refund in full.  

In 2017, the IRS issued a Notice that provided some retroactive relief for same-sex taxpayers.  A taxpayer who had used estate tax exemption or allocated generation skipping transfer tax exemption to gifts to a same-sex spouse can now apply to the IRS to restore his or her exemptions.  Same-sex marriage became legal in Massachusetts in 2004.  Massachusetts same-sex married couples can obtain this relief retroactive to the Windsor decision.

Edie Windsor advocated for same-sex marriage for the rest of her life.  She died in 2017 at the age of 88.

Charitable Remainder Trusts – A Versatile Estate Planning Tool

SwissA Charitable Remainder Trust (CRT) is an irrevocable trust that provides for periodic payments to be paid to individual beneficiaries with a remainder paid to a charity.  CRTs are versatile estate planning tools that can be used to meet various goals – to reduce income taxes, to defer capital gains taxes, to generate lifetime income for the donor or others, and to benefit charities.

A CRT may be funded by a donor with cash, securities, real estate or tangible personal property (such as artwork).  The CRT terms must provide that the donor (and/or his or her spouse or other family member) receive periodic payments for life or a term of years.  The payments may be a percentage of the trust assets (a “unitrust” percentage between 5% and 50% of the total trust assets) or a fixed annuity amount.  The payments may be made annually or more frequently.  The CRT terms may vary in other ways.

At the end of the term or on the death of the surviving beneficiary, the remaining assets in the CRT are paid to a charity or charities selected by the donor.  The donor may select the charities when the CRT is established, but may change the charities at a later time.  To qualify under tax laws, the remainder passing to charity must be at least 10% of the total fair market value of the trust assets.

CRTs offer significant tax benefits.  When the CRT is established, the donor receives an income tax deduction for the value of the remainder that passes to charities.  In addition, capital gains taxes are deferred until distributions are made.

CRTs are a versatile estate planning tool.  We have used them in our practice to meet a variety of client goals.  Stay tuned for an upcoming post on case studies from our practice.

Image from flickr/Jinho Jung

Your Living Will and Dementia

elderlyA Living Will is a legal document that is typically part of an Estate Plan.  In a Living Will, you express your wishes about the medical care you would like to receive at the end of your life.  It includes instructions about when and under what circumstances you want medical care to be withheld or withdrawn resulting in your death.  The instructions in your Living Will guide the person named as your health care agent in your Health Care Proxy in making end of life health care decisions for you when you are unable to do so.   To put it bluntly, you are instructing the health care agent when it is okay to “pull the plug”.

If you do not have a Living Will, Massachusetts law presumes that you wish your life to be extended as long as possible with all available medical treatments and interventions, even if you have a poor quality of life with little chance of recovery.  If that is not your wish, you should put your wishes in writing by signing a Living Will that expresses your wishes.  Verbal instructions to family members are not legally binding.

A recent and interesting NPR program focused on a team of doctors at the University of Washington who are advising patients, while still healthy, to sign a dementia-specific Living Will.  Their sample dementia directive form includes specific instructions about end of life care for those suffering from Alzheimer’s or other forms of dementia.  It allows the patient to express different wishes about desired care at different stages of illness – mild, moderate and severe

These doctors believe specific language for dementia should be included in a Living Will because dementia is unique and as dementia progresses patients become increasingly unable to express wishes about medical care and the side effects of that care become increasingly intolerable.   The University of Washington doctors also cite the increasing number of people who will be suffering from dementia in the future as another reason to specifically address this issue.

I advise all my clients to sign a Living Will and offer my clients recommended language.  The Living Wills I recommend do not yet include specific instructions for dementia.   Although I do not specifically endorse the University of Washington sample dementia directive form, I believe this is an important issue and intend to pay more attention to it in the future.   If you wish to explore this issue further, consult an estate planning attorney or check out the resources available at The Conversation Project.

Charitable Gifts in Your Estate Plan: To Restrict or Not to Restrict?

Explosion_138,_Force_0Imagine you are preparing your Estate Plan.  You wish to make a gift to a certain charity –  the hospital that cured your cancer or your alma mater, for example.  You have a particular cause in mind – to support a certain physician’s research or to fund scholarships for needy students, for example.  Do you restrict the charitable gift to that particular cause?  Or do you give an unrestricted gift and allow the charity to use it for any charitable purpose?

Many clients are tempted to restrict their charitable gift.  I suspect they believe this will ensure that their gift is used in a manner that reflects their specific wishes.  But my advice is often to do the opposite – to give an unrestricted gift that allows the charity to decide how best to use it when the time comes.

There are several reasons why.  First, times change.  The passage of time or the changing of circumstances can cause restricted gifts to become outdated, impracticable, or sometimes even illegal, making the gift unusable or of less value to the charity.  Unrestricted gifts give the charity the flexibility and control to use the gift in the manner that best suits its purpose or mission.  Second, restricted gifts may generate higher administrative costs for the charity making less of your gift available to further the charity’s purpose.  Third, restricted gifts may ultimately require a court legal action by the charity – a petition for cy pres or equitable deviation – that can be a costly and time consuming distraction.

And while I strongly believe this is sound legal advice, that I stand by, it raises the risk that a donor’s gift ends up being used for a purpose wildly different from what the donor may have wanted.  And that risks upsetting a donor’s heirs or creating tension between them and the charity.

Here is an interesting case study.  The University of New Hampshire has recently taken a lot of heat for its use of a large, unrestricted charitable gift from the Estate of Robert Morin.  Morin spent his career working as a UNH librarian.  I doubt he was highly paid, but he was secretly a “millionaire next door” and left his $4 million fortune to UNH without restrictions.

As it was legally entitled to do, UNH used the gift as it saw fit.  $100,000 went to the library, $2.5 million went to upgrade the UNH career center, and $1 million went to purchase a new high-definition video scoreboard for the UNH Wildcats’ stadium.  The rest is still unallocated.  UNH had spent the last several years upgrading its football program and stadium, and the purchase of the scoreboard was I assume an expense that UNH believed was important for raising the school’s stature.

Many have objected to the purchase of the scoreboard as antithetical to the way Morin lived his life.  But this is not the legal standard.  What UNH did was not illegal or even unethical.  Also, there is no real evidence that Morin would have disagreed.  He could have restricted his gift, but chose not to.

When making charitable gifts in your Estate Plan, consider carefully whether to restrict them.  And if restrictions are important to you, there may be a way to work closely with the charitable institution to accomplish your goals, without limiting its opportunities.

Image from wikipedia, Erie Explosion v. Fayetteville Force.

Estate Planning in History: Boston’s “Lotta Fountain”

Lotta_Fountain_-_IMG_3787Looking to do some local sightseeing this summer that combines your love of Boston history and charitable trust administration?  Look no further!  Visit the (recently renovated) Lotta Fountain, a drinking and play fountain for dogs, located on Boston’s Charles River Esplanade.

The Lotta Fountain was a charitable gift from a Trust established under the Will of Lotta Crabtree.  Lotta Crabtree was a very successful 19th century vaudeville star.  At the height of her career she was the highest paid actress in the U.S. and became one of the wealthiest entertainers of her day.  At the time of her death in Boston in 1924, she had amassed an estate of over $4 million (worth over $50 million today).  She never married or had children.  In her Will, she established and funded eight charitable trusts for various purposes, including animal welfare.  One of those charitable trusts was used to establish a $300,000 fund to benefit animals.  That fund led to the design and building of the Lotta Fountain in 1939.

The Fountain later fell into significant disrepair in large part because the Trustees mismanaged the trust and charged excessive fees which depleted the fund’s assets.  In 2004, a Massachusetts court held that the Trustees breached their fiduciary duties.  They were removed and reprimanded, and a surcharge for the excessive fees was imposed.

The Esplanade Association and Boston’s Department of Conservation and Recreation raised money to repair and renovate the Fountain.  It opened June 15.  It will now fulfill Crabtree’s charitable intention by serving as a drinking and play space for Boston’s four legged residents.  If you wish to visit, the fountain is located on the Esplanade between Berkeley and Clarendon Streets, near the Arthur Fiedler Bridge.  I have not yet been there, but I think it is worth a visit this summer.

Image of fountain from wikipedia commons.