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Heckerling 2026 Report 10 - Thursday afternoon, covers:

“From the Front Lines of Undue Influence and Elder Abuse: Essential Ethical and Practical Advice,” by Steve Mignogna, Charles Golbert, and Reid Weisbord
“From Soup to Nuts: Life Insurance Fundamentals – Risks and Products, Income and Transfer Taxes,” by Mary Ann Mancini, Larry Brody, and Don Jansen
“The Day, That Duty . . . Died,” by Phil Hayes, Carol Harrington, Lauren Hunt, and Stefanie Lipson

The report on elder abuse is amazingly thorough and “must” reading. Better that you read the article rather my regurgitating it. Some additional thoughts: Some victims are so embarrassed that they “let” the abuse occur that they don’t report it. Others feel so dependent on the abusers – who might be their only caregivers – that they feel that all their support will disappear if they report the abuse. I have a family member who gives gifts or attempts to transact business with paid caregivers, notwithstanding that we always remind her that she is putting them in an awkward situation. She continues to do it in part because she feels unconstrained and in part because she has Alzheimer’s.

The life insurance report is a good overview of most of the basics, presented by top estate planning lawyers in this area. No new ground (such as the recent high-profile lawsuit) was in the report. My additional thoughts:

Reportable policy sales (part II.Q.4.b.ii of my business structuring materials https://www.thompsoncoburn.com/forms/gorin-newsletter) are not in the report, although I’m sure they’re in the outlines somewhere. They are transfers to those who, but for the transfer, have no family, business, or financial connection to the insured. A reportable policy sale taints the policy, so that the death benefit is not tax free. This measure is aimed at third parties who buy policies as an investment. At my suggestion, the government included a cure (removing the taint) when the insured buys the policy back. I couldn’t have accomplished without education from an ACTEC sponsor who brokers policies, who taught me how the markets work so I could give concrete examples to the government verbally when they called me to discuss my comments.
When planning buy-sell agreements, always check for the § 101(j) notice and consent (mentioned in the report) that has been required since 2006. In my business structuring materials, part II.Q.4.g. covers this topic, including sample notice/consents. Buy-sell life insurance generally is not subject to the reportable policy sale rules.
When buying a policy, consider asking for illustrations from and consultation with an independent expert. The insurance company issuing the policy that is purchased compensates the expert, but the experts do their best to be independent; the most prominent independent expert in St. Louis doesn’t tell its employees how much each insurance company pays, to try to keep them objective.
In indexed universal life, the insurance decides how to share any return with the policy. In variable life, the policy benefits or suffers from all of the performance. I prefer set rules as to the sharing of performance in an equity-based product, but I am not an expert on policy performance.
I continue to see second-to-die life insurance recommended to clients. In an irrevocable trust holding a single life policy, the spouse can have a power of appointment, which is not possible when holding a second-to-die policy. Usually second-to-die life insurance has lower premiums because the premium payments are spread over more years; insuring two lives instead of one does lower the mortality cost component, but it is often not as large in magnitude as the targeted cash buildup component. Given that clients frequently want to change irrevocable trusts, I view having that power of appointment as a huge issue and recommend that clients consider a single-life policy when pitched a second-to-die policy.

The report on the erosion of fiduciary duties is a great overview of cutting-edge developments – “must” reading. Better that you read the article rather my regurgitating it. Some additional thoughts:

Sometimes clients want a jurisdiction other than their own state. Having a directed trust lets the client use such a jurisdiction. Providing great protection to a directed trustee lets the directed trustee offer access to that jurisdiction at a low cost, while the client’s family completely controls the trust and retains fiduciary duties. That being said, I wholeheartedly join the panel’s condemnation of efforts to have no person hold fiduciary duties.
Although generally I share the panel’s views about silent trusts, sometimes beneficiaries are mentally ill or have similar issues and would be harmed by receiving the information. I still think that children need to educated about responsible use of money and valuing preservation of the legacy that their parents (or other donors) have provided them. I have seen parents destroy their children’s lives by overindulging them. Richard Franklin leads an ACTEC subcommittee dedicated to exploring hot to promote beneficiary “well being.” Among his resources, see Family Wealth Series II — Franklin Karibjanian Law & DePersis PLLC.

Steve

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