Category Archives: Mississippi Law Update

Why your 18 year old needs a power of attorney.

I covered this in an earlier post, but I was just speaking to a friend this morning about it and thought I would share it again.  Click here to read why your adult child desperately needs to have a medical power of attorney.

Stay Tuned.

Rob Malin

Practitioners Beware: Modifying or Decanting a GST Grandfathered Trust can cause the Loss of GST Exemption

danger thin iceCare must be taken when decanting or modifying older trusts.  This is especially true if the goal is to extend the term of the trust.  In truth, it should generally be avoided.

Modifying or decanting an irrevocable trust can cause a trust that is exempt from the GST because it was irrevocable prior to the effective date for the GST in 1986 (known as a “Grandfathered Trust”) to lose its exempt status.

Administrative modifications such as changing trustees is generally OK.  What should generally be avoided is shifting benefits to a lower generation.  You should carefully review Treasury Regulation section 26.2601-1 before making any changes whatsoever.

Such trusts may nevertheless be decanted or modified for purposes of extending the term of the trust.  However, the longest time that such a trust may be extended is the latter of: Continue reading Practitioners Beware: Modifying or Decanting a GST Grandfathered Trust can cause the Loss of GST Exemption

Teaching that Old Trust New Tricks: Modifying, Amending or Terminating an Irrevocable Trust

Old Dog New TrickArkansas, Mississippi and Tennessee have each adopted the Uniform Trust Code (or some form of it).

One of the many things that the Trust Code has enabled practitioners to do is to change or perhaps simply “freshen” an old irrevocable trust.  With the Death Tax exemptions being so high, many of these old trusts are no longer needed—at least not for their original purpose.  Some of these changes require judicial approval, but many do not.

Modify to Achieve Income Tax Savings.  Lets take that old trust set up under Dad’s Will to use his tax exemption for Mom (still living).   Maybe Mom’s estate is not going to incur death taxes even if you took Dad’s trust into account.  Maybe the trust holds assets with low tax basis.

Continue reading Teaching that Old Trust New Tricks: Modifying, Amending or Terminating an Irrevocable Trust

Divorced? It is time to update…

soapboxLet me guess.  The last person you want to see after a divorce is me, another dad-gum lawyer.  I don’t blame you.

However, before you say that, know this: your designated beneficiary did not change just because you got a divorce.  Here I am referring to life insurance, retirement accounts such as 401(k)’s and IRAs, and anything that allows you to name a beneficiary.  If you did not change your beneficiaries after you got a divorce, then your ex-spouse probably gets everything if something happens to you.

In both Arkansas and Tennessee, provisions to an ex-spouse are revoked.  This is not the case in Mississippi.  In Mississippi, the provisions for the ex-spouse remain and he or she takes whatever you may have left them—perhaps everything.

No matter where you live, it is still time to revise your Will.  Had a knowledgeable probate judge not been on the bench when Lorenzen Wright’s ex-spouse walked into probate court with his Will that left her everything, she might have been appointed in control of his estate.  In fact, she tried.  Order opening estate of Lorenzen Wright

Now you’re thinking (perhaps cynically)—there’s nothing left to get. Ok. Even if that’s true now, that may not be true five or ten years from now.

When will you update if not now?

Its time for an update.

Stay Tuned.

Rob Malin

Mississippi Modernizes Trust Law by Adopting the Uniform Trust Code

Mississippi Governor Phil Bryant signed the Mississippi Uniform Trust Code into law yesterday.  Click here for the final version.  By doing so, Mississippi became the 27th state (28th if you count DC) to adopt the code (or a trust code substantially derived from it).

Other changes for Mississippi Trust law are on the horizon.

Notably, Mississippi has retained existing Mississippi Spendthrift law codified in the Family Trust Preservation Act of 1998, Sections 91-9-501, et seq.   This act appears to have been modeled on previous versions of the Trust Code.

The Uniform Trust Code (“UTC”) brings a lot to the table.  Continue reading Mississippi Modernizes Trust Law by Adopting the Uniform Trust Code

Mammas Don’t Let Your Babies Grow Up…

. . . without naming you on a medical power of attorney!

Alright.  I know.  That was bad.  However, if you keep up with my blog you will soon learn that I love bad puns.  Now that I have gotten that out-of-the-way. . .

If your adult kids (over 18) don’t do any other estate planning, they should name you as their agent under a medical power of attorney.

Click your state to find state approved forms: Tennessee, Mississippi, and Arkansas.

When your kids are minors you as their parent and natural guardian make their personal and medical decisions for them.  However, as soon as they reach adulthood they are presumed to be able to make their decisions.  Likewise, when they turn 18 (if they do not have a medical power of attorney), neither you nor anybody else can step in to make their decisions if something happens to them.

Continue reading Mammas Don’t Let Your Babies Grow Up…

Are Inherited IRAs Exempt from Bankruptcy?

UPDATE: The Supreme Court has ruled on this matter.  Click here to read more.

Are Inherited IRAs Exempt from Bankruptcy?  That is the exact question that will be argued before the United States Supreme Court.  Click here to read more.  Keep up with the latest on the case by clicking here.

An Inherited IRA is what your retirement account is called in the hands of your named beneficiary (e.g., your child) after you have passed away.

There is no question as to whether retirement assets are exempt in bankruptcy.  The question before the Court is whether Congress intended an inherited retirement account to be included in that protection.

Continue reading Are Inherited IRAs Exempt from Bankruptcy?