Marijuana and the Midterm Election Results

After the 2018 midterm elections, Michigan became the 10th state, along with the District of Columbia, which voted to legalize marijuana.  Although South Dakota voted down a measure to legalize pot, Missouri and Utah voters supported legalizing it for medicinal use.  An initiative in North Dakota failed.  Recreational marijuana is now legal in 10 states; medical marijuana is legal in 33. 

In June, Oklahoma voted to legalize medical marijuana, joining numerous other states that have such laws on the books.  In January, Vermont became the first state to legalize marijuana through its legislature rather than a ballot initiative.  The governor signed the bill into law. 

Marijuana prohibition began 80 years ago when the federal government banned the sale, cultivation, and use of the cannabis plant.  It remains illegal at the federal level.  Overturning prohibition is one of the few hot-button topics with widespread support. A recent poll by the Pew Center found that 62% of Americans, including 74% of millennials, said they supported legalizing marijuana. 

In October, Canada legalized marijuana nationally, becoming the first G7 country to do so. Mexico’s Supreme Court also ruled last month that marijuana prohibition is unconstitutional, paving the way for the country’s new leader, Andrés Manuel López Obrador, to possibly follow Canada’s lead.

 

Tragic Texas Case: Minor on Life Support But Declared Brain Dead

The parents of a 9-year-old girl who was declared brain dead by a Fort Worth, Texas, hospital, have been denied a temporary restraining order extension that would keep their daughter on life support, a judge ruled this week.  Judge Melody Wilkinson of the 17th District Court of Texas said the parents of Payton Summons did not meet the burden of proof for injunctive relief, according to Justin Moore, a lawyer for Payton’s family.

The family’s current restraining order against Cook Children’s Medical Center, which has kept Payton on life support since late September, is set to expire soon.  Payton collapsed while visiting her grandmother after going into cardiac arrest apparently caused by a large, unknown tumor in her chest.  She was transported to the hospital, and doctors established a heartbeat but put her on a ventilator because she was no longer breathing. She was confirmed brain dead after a test determined that she did not have brain activity.  The parents attempted to move her to a facility that would accept her, but none would. 

“Brain death, by definition, is irreversible,” Dr. Sanjay Gupta of CNN has stated.  He continued, “In the United States and most places, it is legally synonymous with death — the same as if your heart stops”.  But brain death means a total loss of brain activity.”  Under Texas law, a person is considered dead when they have suffered an irreversible loss of all brain function, the hospital remarked in a statement from September.  The family has not decided whether to pursue further legal action.

 

 

TX Court Holds Drafts of Trust Are Discoverable


In In re Rittenmeyer, a Texas case, the mother of the decedent was the executor of his estate.  Among other claims, the decedent’s wife alleged that there was a new will that superseded the 2011 Will admitted to probate. The wife sought discovery of drafts of wills prepared after the 2011 Will, trust documents where the decedent was a beneficiary, and communications reflecting the decedent’s intentions regarding providing for the wife. The mother objected to the discovery requests and asserted that the documents were privileged. The wife maintained that the documents are exempt from privilege by Texas Rule Evidence 503(d)(2), which provides that the attorney-client privilege does not apply “if the communication is relevant to an issue between parties claiming through the same deceased client.” Id.The trial court granted the wife’s motion to compel, and the mother filed a petition for writ of mandamus.

The court of appeals discussed the law regarding Rule 503(d)(2):  Texas jurisprudence contains scant authority addressing the exception found in Rule 503(d)(2).  Texas courts have applied the exception to information such as the discovery at issue here wherein a party contends a decedent’s will does not reflect the decedent’s true intent. See, e.g., In re Paschall,2013 Tex. App. LEXIS 1254, 2013 WL 474368, at *7 (trust documents not privileged because the documents are relevant to parties’ claims that they are the decedent’s heirs at law and their assertion that the trust into which the estate was poured is invalid); see also In re Tex. A&M – Corpus Christi Foundation, 84 S.W.3d 358 (Tex. App.—Corpus Christi 2002, orig. proceeding) (permitting depositions of decedent’s counsel regarding decedent’s intentions and capacity where Foundation alleged decedent’s gift to the Foundation was planned and valid whereas estate contended the gift to the Foundation was procured through fraud).

Courts in other jurisdictions have also exempted similar discovery from the attorney-client privilege where, as here, the dispute is between the executor or representative of the estate and someone claiming rights under the decedent’s estate. See Remien v. Remien, No. 94 C 2407, 1996 U.S. Dist. LEXIS 10114, 1996 WL 411387 (N.D. Ill. July 19, 1996) (discovery not subject to the privilege because the dispute arose “between parties who claim through the same deceased client” where the daughter and the co-executors of the father’s estate both claimed property rights through father, and the documents at issue were relevant to that dispute which centered on the father’s intentions regarding the distribution of stock); see also Petition of Stompor, 165 N.H. 735, 740, 82 A.3d 1278, 1282-83 (2013) holding that attorney’s file was not privileged because it was relevant to determine whether the petitioner unduly influenced the parents at the time they executed their estate plan in 2004 and to ascertaining whether the 2004 estate plan documents reflected the parents’ true intent).  The court held that the case at issue was similar to the other Texas cases cited above in that it involved a dispute between a decedent’s estate and a party who claims to be a beneficiary under the estate either through a subsequent will or because the probated will does not reflect the decedent’s intentions.

The court concluded: “Under these facts, we conclude the trial court was within its discretion in applying Rule 503(d)(2) to the discovery, determining that the parties claim through the same deceased client, and compelling relator to produce that discovery.”Id.

Hashish Illegal in AZ; Not Part of Medical Marijuana

An Arizona court has ruled that medical marijuana patients can still face arrest when in possession of hashish because it isn’t mentioned or included by name in a marijuana initiative passed by the voters in 2010.

The Arizona Court of Appeals handed down the decision during the last week of June 2018 in the case of Rodney Jones, a cardholder in the state’s medical marijuana program who was arrested in March 2013 at a Prescott hotel and indicted on one count of cannabis possession and drug paraphernalia possession.

Police said at the time they had found Jones had 0.05 ounces of hashish in a jar, according to the appeals court ruling. After spending a year in jail, Jones waived his right to a jury trial in the case. He was later convicted and sentenced to more than two years in prison with credit for time served.

In his appeal, Jones sought to have his conviction and sentence overturned by the court. But two of the judges on the three-member appeals court panel rejected his request, saying that the state’s medical marijuana act approved in 2010 “is silent” on hashish. “If the drafters wanted to immunize the possession of hashish they should have said so,” the ruling said. “We cannot conclude that Arizona voters intended to do so.”

Hashish is a resin extracted from cannabis plants, and it is often used in oils and other medical marijuana products that are a part of the nation’s growing multi-billion dollar marijuana market. The ruling found that hashish is recognized under state law as a narcotic, distinct from marijuana by the state legislature because of its potency levels.

What is a dynasty trust?

1. What are dynasty trusts?
Most trusts — bank accounts held by one person, a trustee, for the benefit of another person or group — come with expiration dates. A few states, including Delaware and South Dakota, permit trusts to last forever. People from across the U.S. can open dynasty trusts in these states.

2. Why are they getting popular now?
The tax overhaul of 2017 doubled — to $11.2 million for an individual and $22.4 million for a married couple — the amount that can be passed to heirs without triggering estate and gift taxes. However, these higher thresholds are only in place until 2025 giving the rich a potentially limited opportunity to pass more wealth to family members tax-free while also exerting some control over how heirs spend their inheritances.

3. Why use a trust in the first place?
Trusts protect assets from creditors and former spouses. They can enable clever financial maneuvers that maximize the estate and gift-tax exemption. And trusts give donors some control over how the money is spent. For example, a donor can limit withdrawals so money can only be used for college, to purchase a home, or other specific purposes.

4. Why choose a dynasty trust?
Under the previous estate tax limits, many wealthy Americans already had set up trusts for the benefit of their children. If you wish to make your grandchildren or great-grandchildren rich, a dynasty trust can make that easier.

5. How do they work?
They can be funded with cash, stock or other assets, and structured to pay each generation only some of the trust’s proceeds while the rest of the money grows free of estate and gift taxes. While trusts or their recipients generally need to pay taxes on income and gains, they don’t owe capital gains taxes until assets are sold. With the right planning, a trust funded up to the maximum threshold tax exemption amount could be worth far more than that.

Divorce and Estate Plans – Arizona Law

What happens to a will upon divorce?

Under Arizona law, a divorced person’s will remains valid but the ex is disqualified as a potential beneficiary of the estate. But, a decree of separation does not terminate the marriage and does not disqualify the spouse as a beneficiary. If there is a divorce, the ex is removed from any position named in the will such as personal representative, executor, guardian or trustee. A new will could be drafted reinstating the ex.

What happens to a revocable trust upon divorce?

In the event of a divorce, Arizona law treats a living revocable trust similar to a will. If one or both spouses dies before the trust is dissolved as part of the divorce settlement, each spouse’s share of the trust would be distributed to the beneficiaries as if there was no surviving spouse. If there are separate trusts, the ex is disqualified as a beneficiary of the trust. The ex would also be removed as a successor trustee. However, if the trustmaker (settlor) wanted to keep the ex-spouse as a beneficiary or successor trustee, the trustmaker could sign a restatement of the trust to stating this.

What about powers of attorney?

An ex is automatically removed as an agent named in a financial or health care power of attorney. The power of attorney could still be used if an alternate agent is named.

What happens if a divorced person fails to remove the ex as a beneficiary on an IRA?

Under Arizona Revised Statute 14–2804, an ex is automatically removed as an IRA beneficiary. However, the IRA custodian may not have knowledge of the divorce. There are cases where an ex contested the matter in court.

What about pension, 401(k), profit-sharing and other plans governed by ERISA?

ERISA refers to the federal law governing federal retirement plan accounts such as 401(k), profit-sharing plans, pensions, and other federal retirement plans. These are not affected by Arizona law. The beneficiary designation on file with the plan administrator controls.

Is the ex-spouse automatically removed as beneficiary under a life insurance policy?

Yes. However, there are cases where it is part of the divorce settlement or the policy owner wants the ex to remain as beneficiary despite the divorce. To remove these complications, the policy owner should either rename the ex as a beneficiary after the divorce is final, or put a provision in the divorce decree stating the parties intend that the ex remain as beneficiary on a life insurance policy, or both.

How about payable-on-death, transfer-on-death, or in-trust-for provisions?

An ex is automatically removed as a beneficiary on an account with payable-on-death, transfer-on-death or in-trust-for designations. An account holder should update these accounts immediately upon divorce.

What about property held as joint tenants with right of survivorship or community property with right of survivorship?

Upon divorce, the property automatically becomes tenants in common – each party owns a separate 50% interest, and his or her interest becomes part of his or her estate at death.

Supreme Court rules for New Jersey in sports betting case  

The U.S. Supreme Court ruled Monday that states can legalize sports betting, breaking up Nevada’s monopoly on the practice.

The court upheld the legality of a 2014 New Jersey law permitting sports betting at casinos and racetracks in the state and voided the federal Professional and Amateur Sports Protection Act. Some states see sports betting, like lotteries, as a potentially important source of tax revenue.

The Supreme Court justices struck down the entire federal law on a 6-3 vote, with Justices Ruth Bader Ginsburg, Sonia Sotomayor and Stephen Breyer dissenting.

“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own,” Justice Samuel Alito wrote in the majority opinion.

The state law at issue would allow people age 21 and above to bet on sports at New Jersey casinos and racetracks but would ban wagers on college teams based in or playing in the state.

“Today’s ruling will finally allow for authorized facilities in New Jersey to take the same bets that are legal in other states in our country,” New Jersey Gov. Phil Murphy said in a statement. “I look forward to working with the Legislature to enact a law authorizing and regulating sports betting in the very near future.”

The ruling takes the U.S. a step closer to legal sports betting in numerous states, possibly even nationwide. Currently, the practice is legal only in select places such as Nevada, home to the gambling capital Las Vegas. While Nevada’s Gaming Control board reported $4.8 billion in sports bets last year, the black market total is considered to be many times the legal market.

Americans wager “$150 billion illegally each year through off-shore, black market bookies,” DraftKings CEO Jason Robins said in a statement. The fantasy sports company has nearly 10 million customers across the country. After the ruling, DraftKings announced plans to launch a mobile platform for sports betting to tap into the new market. FanDuel is an online based betting platform where you can bet for fun, and once you are confident, you can bet with cash. This could be a good place to start getting into online betting because you can start off playing whilst not risking any of your assets.

“States are now free to allow their residents to place mobile sports bets with licensed, trusted companies based in the U.S. and that pay taxes here,” Robins said.

Websites Delete Ads

Craigslist has closed its dating ads section in the USA in response to a new bill against sex trafficking. The bill states that websites can now be punished for “facilitating” prostitution and sex trafficking. Ads promoting prostitution and child sexual abuse have previously been posted in the “personals” section of Craigslist. In a statement, Craigslist said the new law would “subject websites to criminal and civil liability when third parties (users) misuse online personals unlawfully”.

The US Congress recently passed the Allow States and Victims to Fight Online Sex Trafficking Act. Websites are not usually held responsible for the content that members post, as long as illegal material is removed as soon as the service provider is made aware of it. But, the bill states that “websites that facilitate traffickers in advertising the sale of unlawful sex acts” should not be protected. It imposes fines and prison terms for those who own or operate a website that facilitates prostitution. The website Reddit also banned its escorts message board for the same reason.  

 

CA Allows Driverless Cars

This week the California Department of Motor Vehicles approved new rules that would allow self-driving cars to hit the road without a human behind the wheel at all.

These regulations, which take effect on April 2, 2018, will pave the way for companies like Waymo, Uber, GM, and others to continue autonomous vehicle testing on the roads of the Golden State and likely will lead to the technology becoming mainstream.

In 2014, California was the first state to have rules for testing autonomous vehicles on public streets. But many felt that those regulations were too restrictive and unable to adapt to a technology that is rapidly maturing. As a result, testing programs have flourished in other states, like Arizona.

“This is a major step forward for autonomous technology in California,” DMV Director Jean Shiomoto said. Safety is our top concern and we are ready to begin working with manufacturers that are prepared to test fully driverless vehicles in California.”

Among other requirements imposed as part of the permitting process, companies must show that there is a link for remote control, allowing the car to be operated from afar.

Autonomous vehicle makers must also provide a “law enforcement action plan” that includes instructions as to how to contact the remote human operator and how to disengage the AV mode, among other requirements. The rules do not say what type of data law enforcement will be able to access from AVs. Consumer Watchdog, a group that has routinely opposed AV technology, slammed the new rules this week. “A remote test operator will be allowed to monitor and attempt to control the robot car from afar,” said John M. Simpson, the group’s privacy project director. “It will be just like playing a video game, except lives will be at stake.”

 

New Tax Laws For 2018

Between the IRS and the recent changes in the tax law, here are a number of significant changes that will impact taxes now and going forward.

Those who are married and filing jointly will have an increased standard deduction of $24,000, up from $13,000 as under previous law.

Single taxpayers and those who are married and file separately now have a $12,000 standard deduction, up from the $6,500.

For heads of households, the deduction will be $18,000, up from $9,550.

The personal exemption has been eliminated with the tax reform bill.

A new 37 percent top rate will affect individuals with incomes of $500,000 and higher. The top rate applies for married taxpayers who file jointly at $600,000 and over. 

The estate tax exemption doubles to $11.2 million per individual and $22.4 million per couple in 2018.

The child tax credit has been raised to $2,000 per child — those under 17 — up from $1,000. A $500 credit is available for dependents who do not get the $2,000 credit.

The deduction for mortgage interest is capped at $750,000 for mortgage loans  taken out after Dec. 15 of last year. The limit is still $1 million for mortgages that were established prior to Dec. 15, 2017.


The itemized deduction is limited to $10,000 for both income and property taxes paid during the year.





Employees who participate in certain retirement plans ‒ 401(k), 403(b) and most 457 plans, and the Thrift Savings Plan – can now contribute as much as $18,500 this year, a $500 increase from the limit for 2017.

Savers who contribute to individual retirement accounts will have higher income ranges following cost-of-living adjustments. Note that the deduction phases out for individuals and their spouses who are covered by workplace retirement plans.
 For single taxpayers, the limit will be $63,000 to $73,000.
 For married couples, the phase out range will vary depending on whether the IRA contributor is covered by a workplace retirement plan or not. When the spouse who is investing has access to an employer plan, the range is $101,000 to $121,000.

For individuals who don’t have a retirement plan but are married to someone who does, the phase out has been raised to $189,000 to $199,000.
The phase out was not adjusted for married individuals who file a separate return and who are covered by a workplace retirement plan. That range is $0 to $10,000.