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The Trusts & Estates Bulletin is published monthly by the Trusts & Estates Section, coeditors:

Amy L. McEvoy, Sheppard Mullin, AMcEvoy@sheppardmullin.com

Nelson J. Handy, Fiduciary Law Services, Inc., nelson@fidls.com

Diane Young Park, Weinstock Manion Reisman Shore & Neumann, dpark@weinstocklaw.com

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Volume 6, Number 10 • October, 2011• Archives of Past Issues
Visit the Trusts & Estates Section web page

Coming Events

Aviva K. Bobb Advanced Probate Volunteer Panel Attorney Training Symposium

This annual program covers topics of interest to PVP attorneys generally not covered in the mandatory/refresher course offered in the Spring. This year's program has a medical theme and will address the roles of different medical providers, reading medical charts, determining capacity, interplay between LPS and probate conservatorships and use of psychotropic medications for non-traditional purposes, amongst other topics.

Date: October 22, 2011
Location: Intercontinental Hotel, Century City

Click here to register for this event

Best Practices

Portability election (for post 2010 estates) must be made on a timely filed estate tax return. The IRS issued Notice 2011-82, which reminds executors of the estates of decedents dying after December 31, 2010, of the need to file a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, within the time prescribed by law (including extensions) in order to elect to allow the decedent's surviving spouse to take advantage of the deceased spouse's unused exclusion amount, if any.

The IRS posted Form 8939 (Allocation of Increase in Basis for Property Acquired From a Decedent) and it can be viewed at http://www.irs.gov/pub/irs-pdf/f8939.pdf.

On September 6, 2011, the Internal Revenue Service issued new proposed regulations (REG-128224-06, 76 Fed. Reg. 55322) providing guidance on which costs incurred by an estate or non-grantor trust are subject to the 2-percent floor for miscellaneous itemized deductions under section 67(a) of the Internal Revenue Code. The Internal Revenue Service notes that the proposed regulations now reflect the Supreme Court’s reasoning and holding in Michael J. Knight, Trustee of the William L. Rudkin Testamentary Trust v. Commissioner, 552 U.S. 181, 128 S. Ct. 782 (2008), in which the Court held that fees paid to an investment advisor by a non-grantor trust or estate generally are subject to the 2-percent floor for miscellaneous itemized deductions under I.R.C. Section 67(a). The proposed regulations provide that a cost is fully deductible to the extent that the cost is unique to an estate or trust. For such purpose, the proposed regulations clarify that it is the type of product or service provided to the estate or trust in exchange for the cost, rather than the description of the cost of that product or service, that is tested to determine the uniqueness of the cost. The proposed regulations also provide that the portion of a bundled fee attributable to investment advice (including any related services) will be subject to the 2-percent floor. In addition, the proposed regulations limit the costs that are subject to allocations pursuant to section 67(e) of the Internal Revenue Code and allow the use of any reasonable method to perform such allocations.

A Compendium of Recent Cases

Cases appear in chronological order, with the oldest case appearing first.

Trusts and Estates
Trustee's duties were owed solely to settlor with power to revoke during settlor's lifetime. Until the trust became irrevocable upon settlor's death, trust beneficiaries had no rights to the trust property and no say in how trust was managed. Until such time as settlor was adjudicated legally incompetent to handle his own affairs, or until he self-imposed some formal restrictions on his ability to handle his assets--such as by making his trust irrevocable--settlor remained legally entitled to do what he wanted with the trust assets, and trustee had no authority to stop him. Trustee had no special obligation upon him to question settlor's competency or capacity to make decisions. Nothing in settlor's will obligated his wife to choose between sharing in his estate or retaining her share of the community property where settlor did not purport to dispose of community property in his will.
    Estate of Giraldin - filed September 26, 2011, Fourth District, Div. Three
    Cite as 2011 S.O.S. 5291
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Los Angeles County Bar Association
2011-12 Trusts and Estates Section Newsletter
TRUSTS & ESTATES SECTION REVIEW
Amy L. McEvoy, Co-Editor,  Diane Young Park, Co-Editor,   Nelson J. Handy, Co-Editor

SECTION OFFICERS
Chair
Stuart D. Zimring

Vice-Chair
Kira S. Masteller

Secretary/Treasurer
Amy L. McEvoy

Immediate Past-Chair
Nelson J. Handy

Section Administrator
Erica Leon

EXECUTIVE COMMITTEE MEMBERS

Ronald Berman
Jill A. Brousard
Jackson Chen
Kim D. Doering
Larry S. Dushkes
Kenneth A. Feinfield
Jana Gordon Garrotto
Sibylle Grebe

Diane Young Park
Nicole M. Pearl
Jacqueline Real-Salas
Myer J. Sankary
Gabrielle A. Vidal
Caroline C. Vincent
William Lane Winslow


SUB-SECTION MEMBERS
Liaison Beverly Hills Bar Association, Trudi Sabel Schindler
Liaison County Counsel, Susan Long, Deputy County Counsel
Liaison Public Interest, Yolande P. Erickson
Ex Officio, James R. Birnberg
Ex Officio, Laura Conti
Ex Officio, Susan Jabkowski
Ex Officio, Thomas H. Kenney
Ex Officio, Matthew W. McMurtrey
Ex Officio, Jonathan L. Rosenbloom
Ex Officio, Gary M. Ruttenberg