Goffe: Estate Planning, Tax and Ethical Considerations Where Cannabis is Part of an Estate Plan or Probate


Estate planning attorney Wendy Goffe authored an article for Bloomberg Tax’s Daily Tax Report® titled “INSIGHT: When Cannabis and Estate Planning Intersect: Make Sure Your Client’s Plan Doesn’t Go Up in Smoke,” published March 26, 2019. In the article, Goffe provides a general overview of federal and state laws with regard to cannabis and discusses considerations for attorneys in providing estate planning advice to clients who have cannabis-related assets.

As of January 2019, nearly two-thirds of the states, Guam, Puerto Rico, and the District of Columbia permit the legal use of cannabis for medical reasons and 10 states allow it to be used recreationally. Goffe outlines:

  • The response of the Department of Justice (DOJ) to the legalization of cannabis in the states and territories with respect to enforcing federal law -- cannabis is a Schedule I substance under the Controlled Substances Act, on par with heroin, LSD and cocaine.
  • Guidance provided by the Treasury Department to financial institutions that provide services to cannabis-related businesses.
  • Laws currently in effect in Washington and California, where both medical and recreational marijuana are legal.

Goffe stresses the importance for investors, producers, processors, retailers, and other stakeholders within the legal cannabis industry of reacting to a quickly changing legal landscape. She also examines ethical considerations for lawyers who by representing the interests of cannabis industry members or fiduciaries who administer property derived from the cannabis industry may run afoul of federal law.

Goffe concludes, “…the DOJ policy is evolving, provides little protection upon which one can unquestionably rely, and can change in an instant. Therefore, cannabis users and businesses remain at risk of civil and criminal prosecution by the DOJ. Whether legal or not, individuals with a business interest related to cannabis must consider how this asset is to be handled in their estate, and lawyers need to be prepared.”

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