The WealthCounsel: Current Developments in Estate Planning and Business Law (September 2021)

Taxpayers Granted Extension to Elect out of Automatic Allocation of GST Exemption

I.R.S. Priv. Ltr. Rul. 2021-33-007 (Aug. 20, 2021)

Takeaways: Although the IRS granted the taxpayers an extension to elect out of the automatic allocation of the GST exemption, the couple may not be as gracious to their attorney or accountant, who could be liable for damages and receive ethics complaints for failing to advise the couple of their ability to elect out of the automatic GST exemption.

Illinois Passes Electronic Wills and Transfer on Death Laws

755 Ill. Comp. Stat. 6/1-1 to 6/20-45; 755 Ill. Comp. Stat. 27/1 to 27/95 (2021)

Takeaways: Although several states enacted e-wills statutes before the COVID-19 pandemic, it is likely that the pandemic will spur more states, like Illinois, to pass similar legislation. Many estate planners recommend revocable living trusts (RLTs) over TODIs for their clients, as RLTs provide the best solution in the event the individual becomes incapacitated before death. 

Oregon Supreme Court Finds No Due Process Violation from Oregon’s Imposition of Estate Tax on Assets of Montana Trust

Estate of Evans v. Dep’t. of Rev., 492 P.3d 47 (Ore. 2021)

Takeaways: The Oregon Supreme Court distinguished the facts in Estate of Evans from those in Kaestner, in which the state of North Carolina was precluded under the due process clause from taxing trust assets where the in-state beneficiaries had not received income from the trust, had no right to control the trust or distributions from it, and the trustee had absolute discretion over both the timing and amount of distributions (and had made none during the period in question).

Mississippi Supreme Court Enforces Noncompetition Agreement in Family Business Dispute

Cascio v. Cascio Investments, LLC, 2021 WL 3781329 (Miss. 2021)

Takeaways: The difficulties resulting in the Cascio litigation likely could have been avoided if Phil Sr. had executed a well-thought-out business succession plan designed to equalize his children’s inheritances while also recognizing his son’s contributions to the family businesses. Attorneys should encourage clients who own businesses to create a succession plan well before their retirement that not only preserves the businesses but also facilitates peaceful family relationships.

Legal Zoom Seeking Arizona Alternative Business Structure License

Takeaways:  Commentators have debated whether attorneys employed by companies such as LegalZoom will be pressured to put the success of the company before their clients’ best interests. Rocket Lawyer, which is providing legal services to customers as a participant in Utah’s regulatory sandbox program, has also applied to become an alternative business structure in Arizona.

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