More Omni-Business

By Doug Chalgian on March 8, 2024

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The same omnibus legislation that brought us Secret Trusts also made several other notable changes to probate law, including:

Standby Guardians for LII’s

Courts can appoint standby guardians in EPIC guardianships now, just like they have always been able to do for DD guardians.  The law will also allow standby guardians to fill in on a temporary basis during periods in which the appointed guardian is unavailable.

Analysis:  I like it.

No More Big Gifts from Clients

An brand new law says lawyers who draft wills, trusts and other such instruments can’t make themselves beneficiaries of a substantial gift unless they are related to the person making the gift/devise.

By “related” they mean: (a) A spouse of the individual. (b) A lineal ascendant or descendant of the individual or the individual’s spouse. (c) A sibling of the individual. (d) A spouse of the individual described in subdivision (b) or (c).

By “prepared” they mean: Directly or indirectly prepared or supervised the preparation, execution, or both, and that includes basically anyone in the same firm as the benefiting attorney.

“Substantial” means more than $5,000.

Analysis:  Crap. I’ll never retire.

Clarification of the “Qualified Trust Beneficiary”

The term that has flustered so many trust attorneys for so long has been simplified.  Thanks to the new legislation it’s now going to be easy to figure out who is and who isn’t a “qualified trust beneficiary.”  The new law says:

(g) “Qualified trust beneficiary” means either of the following:

(i) A trust beneficiary whom the settlor intends to benefit as a material purpose of the trust and to whom 1 or more of the following apply on the date the trust beneficiary’s qualification is determined:

(A) The trust beneficiary is a distributee or permissible distributee of trust income or principal.

(B) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the interests of the distributees under the trust described in sub-subparagraph (A) terminated on that date without causing the trust to terminate.

(C) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.

(ii) If on the date a trust beneficiary’s qualification is determined there is no trust beneficiary described in subparagraph (i), a trust beneficiary to whom 1 or more of the following apply on the date the trust beneficiary’s qualification is determined:

(A) The trust beneficiary is a distributee or permissible distributee of trust income or principal.

(B) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the interests of the distributees under the trust described in sub-subparagraph (A) terminated on that date without causing the trust to terminate.

(C) The trust beneficiary would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.

Analysis:   I’m still confused.

Imputed “Knowledge” Relocated

The definition of when someone can be said to have knowledge of a fact has been moved from the MTC to EPIC, so that it applies more broadly (the MTC being a subset of EPIC).

Analysis:  That makes sense.

 

All of these changes, and a few others, took effect February 21, 2024.

Click here to read the law yourself. 


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mm By: Doug Chalgian
Doug Chalgian

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