The blog reports information of interest to seniors, their families, and caregivers. Recurrent themes are asset and decision-making protection, and aging-in-place planning.
In this article we return to the saga of James Howells, the subject of a previous article on this blog, as he continues his years-long battle to get back a hard drive that contains a discarded bitcoin key currently worth somewhere around $800 million by offering to purchase a landfill in Great Britain in an effort to find the wallet before it closes down. James Howells had repeatedly requested that the Newport City Council, in South Wales, grant him access to the mountains of waste to find the hard drive that was accidentally discarded in 2013.
When his repeated requests were denied, he offered to fully fund the excavation process and share 25% of the recovered Bitcoin with the Newport City Council. When that offer was rejected, he filed a lawsuit to compel the Council to accept his offer. The lawsuit seems to be in the vein of 'taxpayer" suits common in the U.S. where a taxpayer contests some official act or denial as wasteful of taxpayer dollars. That case, however, ended with a judge dismissing his claim holding that Howells had “no reasonable grounds” for bringing the claim and that there was “no realistic prospect” of success if the case were to proceed to a full trial."
Whether this is a welcome or ominous development for Mr. Howells remains to be seen. Mr. Howells has not given up, though, as he is now proposing to purchase the landfill. His plan involves either reclaiming and remediating the landfill and turning it into a park, or re-launching it as a landfill.
Mr. Howell's predicament underscores the risks and challenges of cryptocurrency investing beyond just the risk of investment. Digital currencies have digital or virtual 'keys" that must be protected. For more information, please consider the following:
A recent case provides an object lesson for those in a second marriage who either have a trust separate from their spouse, or have retained their original trust upon remarriage. The case is also instructive regarding trust funding in general.
Only a properly and completely funded trust protects your estate planning choices. A pour-over will does not magically repose assets in your trust upon death; it must be probated in order to be effective, at least in most states. Probate means risk, cost, and expense. A pour-over will is subject to the same limitations, requirements, risks, costs, expenses, advantages and disadvantages and rewards as any will created where there is not trust. One of these risks is spousal claims.
The Montana Supreme Court held that a widow could claim a spousal elective share of the deceased husband's estate, notwithstanding that her deceased husband’s will directed everything to his trust, and, by implication, even if the trust provides a substantial share to the surviving spouse. In Silverwood v. Tokowitz(Mont. No. S-23-0114, January 12, 2024).
Carol Tokowitz was married to her husband, Neal Tokowitz, for 30 years before he died. Mr. Tokowitz left behind surviving children from a previous marriage. He had a pour-over will that funded a revocable living trust. His will did not name his wife or anyone else as a beneficiary, but, as is customary, directed assets only to the trust.
Mr. Tokowitz's executor, Mr. Silverwood, filed a petition to probate the will, suggesting that some assets or property were not owned or controlled by the trust. Mrs. Tokowitz asserted her rights to the elective share of her late husband’s estate under the Wyoming spousal elective share statute.
An elective share is a term used to describes a proportion of an estate which the surviving spouse of the deceased may claim in place of what s/he was left in the decedent's will. It may also be called a widow's share or statutory share, or described as an election against the will, or a forced share. In Ohio it is governed by Ohio Revised Code 2106.01 (last accessed 2/10/2025), and is often described as a surviving spouse "taking" against the will. In Missouri, it is governed by Section 474.160 of the Revised Statutes of Missouri (last accessed 2/10/2025).
The Wyoming spousal elective share statute provides that a married person domiciled in the state must provide a spouse at least an elective share subject to distribution in the will. If, as in this case, the surviving spouse is not a parent of the decedent’s surviving children, the elective share is a quarter or twenty-five (25%)of the estate.
The probate court granted Mrs. Tokowitz her spousal share. Mr. Silverwood and a trustee, Randy Green, (hereafter referred to simply as "Mr. Tokowitz's family") argued that she was not entitled to take a spousal elective share and that taking an elective share should prevent her from receiving anything from the trust. In essence, Mr. Tokowitz's family was arguing that granting her an elective share, on top of a percentage of the assets in the trust estate permitted Mrs. Tokowitz to receive more that Mr. Tokowitz intended her to receive. Indeed, given an elective share of the probate estate, it is likely that Mrs. Tokowitz's total inheritance exceeded that which she would have received if all assets had been reposed in the trust at death. A hypothetical illustration follows:
The probate court declined to make any ruling regarding disposition of the trust estate. Mr. Tokowitz's family appealed.
Mr. Tokowitz's family first argued that although Mr. Tokowitz was a Wyoming resident, he was not domiciled in Wyoming full-time. A domicile is a legal residence where a person intends to stay. A person can have many residences but only one domicile. The Supreme Court rejected the argument. The petition to probate the will (filed by Mr. Tokowitz's family) will stated that he was a resident of Park County, Wyoming, but the pour-over will stated that he was domiciled there. According to the court, since the will presented evidence that the decedent’s domicile was in Wyoming, Mrs. Tokowitz met her burden of establishing a Wyoming domicile. The burden then shifted to Mr. Tokowitz's family to disprove the statement in the will, and they failed to show that Mr. Tokowitz was domiciled elsewhere. According to the Supreme Court, it was sufficient that the probate court implied that Mr. Tokowitz was domiciled in Wyoming when the will was created and executed, and applied Wyoming law to determine Mrs. Tokowitz's elective share. In other words, the probate court did not make an explicit "finding" regarding Mr. Tokowitz's domicile.
The Tokowitz's family's next argument concerned the amount Mrs. Tokowitz would receive under the trust. They asserted that the probate court should not have given her the elective share because it did not know whether she would receive more or less than a quarter of the estate under the trust. The Supreme Court dismissed the argument holding that the trust’s terms are not relevant to the probate estate. The spousal elective share statute solely pertains to the will. Mr. Tokowitz’s will only left his property to his trust and did not name his wife, which effectively entitles her to the spousal elective share statute.
Finally, Mr. Tokowitz's family claimed that the property was not subject to probate because the will poured all assets and property into the trust. Property that passes by way of a pour-over will, however, is part of the probated estate and subject to the spousal elective share. Assets that transfer through a pour-over will are not exempt from the probate estate, or its rules and regulations simply because they estate assets ultimately repose to a trust.
The Supreme Court held that the lower court did not err when it declined to rule on Mrs. Tokowitz’s interests in the trust, holding that once the assets pass to the trust, they become non-probate assets. The Supreme Court could find no case law or statutory authority supporting a ruling on non-probate assets in the probate case.
The Supreme Court of Montana held that the district court correctly allowed Mrs. Tokowitz to take a spousal elective share, and that the lower court rightly determined that it lacked jurisdiction to rule on claims arising from the trust.
This case became very complicated by the circumstances and the law. One assumes the value of the assets warranted appeal to the Montana Supreme Court. All of the complexity, cost, and expense would have been unnecessary if the property and/or assets were funded to the trust prior to Mr. Tokowitz's death.
In the video above, I discuss a recent MSN.com article entitled "Five Items to Leave Out of Your Revocable Living Trust." (the article link is already broken, but there is an image in the video, and you can also view the article online here(last accessed 1/18/2025); you will have to scroll down past the first few articles).
The author writes as follows:
"Vehicles. Whether it’s a ’63 Corvette, Harley chopper or prop plane, all that’s required to pass it on is a simple written instruction to transfer the title to a beneficiary. In a trust, you’re exposed to lawsuits over accidents that involved the vehicle."
Generally, I disagree. Vehemently.
In the video, I discuss the following:
1. Articles, publications, seminars, and presentations should never be construed as legal advice
2. The author suggests that only a simple written instruction is necessary to transfer a title to a beneficiary, which statement is misleading or incorrect.
3. Beneficiary and Transfer on Death Designations may sometimes work to avoid probate, but they have limitations and risks, and do not constitute a 'plan' to avoid probate (see links below).
4. The liability issue raised by the author makes no sense for most revocable living trusts settled in most states.
5. The author assumes that the only purpose of a revocable living trust is to avoid probate, which is untrue, and assets outside of a trust do not serve and may impair lifetime planning benefits of a trust:
Consistent and competent lifetime management of assets is a lifetime planning objective best accomplished with a trust.
Guardianship avoidance is a lifetime planning objective best accomplished with a trust.
Protection of assets from a court-appointed guardian is a lifetime planning objective that can only be accomplished with a trust.
Aging in Place Planning is a lifetime planning objective that can only be accomplished with a trust.
I acknowledge in the video that there are always exceptions, and that the author may not have actually been considering revocable living trusts when drafting the article, but generally I disagrees with the headline and conclusion of the author regarding planes, trains, and automobiles.
I urge you to attend an "Aging in Place Planning" presentation by signing up for an upcoming live webinar. You can find these periodically on my blog or on the events page of the firm's Facebook page. You don't need to wait, however, for a scheduled event; there is a recorded version available here: https://bit.ly/Aging-in-Place-Workshop. You might also consider inviting your children and trusted advisors to attend.
to watch the video in a separate larger and more easily seen frame (much encouraged).
In this video, Attorney Donohew discusses a Washington Post investigative report about "fall assist" 911 calls from assisted living and other institutional care providers, and the prevalence of "No-lift" policies.
"[l]ift-assist 911 calls from assisted living and other senior homes have spiked by 30 percent nationwide in recent years to nearly 42,000 calls a year...That’s nearly three times faster than the increase in overall 911 call volume during the same 2019-2022 period, the data shows."
The article notes this practice is particularly prevalent in Illinois, and why the increasing number of calls is causing controversy.
Indeed, as set forth in Section V of this article, case reports and news reports from Pennsylvania demonstrate a potentially significant trend, where third-party creditors are using filial support laws to compel payment or cooperation by adult children to cover their parents’ costs in nursing homes or similar care settings. While the Pennsylvania trend is echoed in at least one other state, South Dakota, Section VI of this article demonstrates that a lack of national consensus in application of filial support laws can create inconsistent results among U.S. states, which may increase the potential for results that seem surprising or unfair.
The following are links to articles on this blog regarding filial responsibility laws:
The following are links to articles describing legal mechanisms by which nursing homes attempt to create filial responsibility even in the absence of filial responsibility statutes:
Finally, in the video I refer to a CMS policy paper that advocates enforcement or adoption of filial responsibility. I cannot find the link to that paper, but am searching for same. The paper was, in my opinion, the culmination of an effort that included a 1983 administrative interpretation of Medicaid regulations which permitted state Medicaid administrators to "require adult family members to support adult relatives without violating the Medicaid statute." See, Medicaid Manual Transmittal No. 2, HCFA Pub. 45-3, no. 3812 [New Developments 1983 Transfer Binder], 3 Medicare & Medicaid Guide (CCH) 5f 32,457 (Feb. 1983). I will supplement when I locate the paper.
The estate tax is a tax on the value of a person’s assets and property at the time of their death. Upon your death, if the total value of your estate is above a certain threshold amount, known as the federal estate tax exemption, the IRS requires your estate to pay the tax before any assets can be passed to your beneficiaries. Under current law, every year this exemption rises with inflation, but in any given year, politicians can change the amount of your coupon. Worse, the exemption amounts currently in place sunset or expire beginning in 2026.
In 2024, the federal estate tax exemption is $13.61 million for individuals ($27.22 million for married couples). Simply put, if you die in 2024, and your assets are worth $13.61 million or less, your estate won't owe any federal estate tax. If, however, your estate is worth more than $13.61 million, every dollar more than that will be taxed at a whopping 40% tax rate.
The current $13.61 million estate tax exemption is set to expire on Jan. 1, 2026, and return to its previous level of $5 million, which when adjusted for inflation is expected to be around $7 million. Of course, we can't know whether Congress will step-in before to change the law, and we can't know if that change will be helpful or harmful to your current estate plan.
Additionally, there are some inherent variables in your estate plan, in addition to the tax variables. We don't know (1) when you will die, (2) how much money you’ll have when you die, (3) what the estate tax exemption will be when you die, and as importantly (4) how long, legally or medically, you will be able to plan for yourself or change your estate plan. That’s why it’s so important to work with an attorney who will develop a long-lasting relationship with you and have processes in place to ensure that you are updated when the law changes and put strategies in place to protect your family, regardless of the amount of the estate tax exemption or the value of your assets.
In addition, the state you live in can also have an estate tax, separate and apart from the federal government’s estate tax. Fortunately, both states in which most of my clients reside, Ohio and Missouri, have neither an estate nor inheritance tax. Illinois, a state in which I am admitted to practice, but in which I no longer practice, is one of seventeen states that have an estate or inheritance tax. In Illinois, any amount of your estate over $4 million will be taxed at a graduated rate that goes as high as 16% based upon the 2024 tax rates. Eleven states, and the District of Columbia, have an estate tax, while five states have an inheritance tax, where they tax people who live in their state when they receive an inheritance. Currently, Maryland is the only state in the nation that has both an estate tax and an inheritance tax.
By using various estate planning strategies, you can reduce — or even eliminate all together — your estate tax liability. Some of the strategies are simple, but the more money you have, the more complex they’ll need to become, for example by using irrevocable trusts. Regardless of the method you employ, without question, these strategies can save your family from a massive tax bill, and are therefore well worth it the time and expense necessary to design, draft, and implement them. I discussed many of these strategies in my previous article, Looking Ahead to 2026- Estate Tax Exemption Sunset and Current Planning Opportunities.
If you’d like to learn more, or need to get a plan in place to save your family from a major tax burden, give us a call.
You can watch the video in this article by pressing play.
If you would rather watch the video in a separate window, click here.
Funding a trust is the most important first task in implementing the trust. It begins immediately upon executing or signing the trust, and consists of transferring all of your assets and property to the trust. A trust only governs the property or assets it owns or controls. In the video, Attorney Donohew introduces and explains how to use a Trust Funding Checklist to ensure that a trust is fully and properly funded.
Once your Trust is funded, you will need to keep and maintain the trust by, among other things, keeping the trust funded with newly acquired assets. If you purchase a new house or additional real estate, for example, the new property will need to be put in your trust. If you take title directly in the name of the trust, you won't have the administrative burden of preparing a new deed. Similarly, If you open a new bank or investment account, opening it directly in the name of the Trust will make it easier. In other words, keep your trust in mind as you make other legal and financial decisions.
You should also review your estate plan, and the documents that comprise the plan periodically. You should also review your plan after any major change in your life, or in the lives of your beneficiaries and fiduciaries, and any time your circumstances, goals or needs change dramatically. Regardless, the law and practice change periodically, so even if everything in your life seems to be stable and consistent, periodic review ensures that your plan is taking advantage of developments, and is not harmed or thwarted by changes in the law or practice.
The following are important articles regarding trust funding and links to funding forms:
Homeowner's, Property & Casualty Insurance Policy ANI
Motor Vehicle Insurance Policy ANI
Motor Vehicle Title (Ohio)
Motor Vehicle Transfer on Death (Missouri)
The forms provided on this page are general and simple forms. These use of any or all of these forms may not be applicable to your situation and circumstance. Accordingly, these forms should be used only after consultation with counsel.
Nothing contained herein should be construed as constituting legal advice which can only be given by a licensed attorney familiar with you goals, needs, and circumstances.
