Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, August 17, 2017

Article on ERISA: Extracontractual Damages Mandated for Benefit Claims Actions

ERISA-simplifiedGeorge Flint recently published an Article entitled, ERISA: Extracontractual Damages Mandated for Benefit Claims Actions, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Before 1974, participants in employer retirement plans seeking monetary relief for denied benefits were often hindered by procedural and jurisdictional obstacles. The Employee Retirement Income Security Act (“ERISA”) was passed in an effort to preclude hindrances and establish federally protected causes of action, which include equitable remedies and extracontractual damages. However, a jurisdictional split in the interpretation of ERISA in the federal circuits and among the states continues to impede participants full relief for their injuries. Furthermore, disparaging dicta in the Supreme Court decision in Massachusetts Mutual Life Insurance Co. v. Russell incorrectly suggests Congress intentionally foreclosed contractual remedies not expressly stated in ERISA.

ERISA should protect participants and deter employers, or fiduciaries from abusing their positions, as Congress intended. When interpreting the plain language of the act and the legislative intent, ERISA proposed to deter the financial incentive of the administrators and employers from denying, or delaying requests for allotments from the participant’s retirement plan by establishing a full range of legal and equitable remedies under contract law and trust law theories, which include extracontractual damages. Under the teleological method of interpreting legislative intent when ambiguity arises, the court examines statutory language, prior case law, and legislative history. The legislative history makes clear that Congress intended ERISA to include remedies available under state contract and trust law, as well as federal common law including extracontractual damages.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 17, 2017 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Article on Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience

MarriageorCohabitationE. Gary Spitko recently published an Article entitled, Intestate Inheritance Rights for Unmarried Committed Partners: Lessons for U.S. Law Reform from the Scottish Experience, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

No U.S. state affords intestate inheritance rights to the unmarried and unregistered committed partner of a decedent. This omission has become more and more problematic in recent years as cohabitation rates in the U.S. have risen and marriage rates have declined. Indeed, the phenomenon of increasing cohabitation rates and declining marriage rates is observed across the developed world. Unlike in the United States, however, a significant number of foreign jurisdictions have reformed their law to afford intestate inheritance rights to a decedent’s surviving unmarried committed partner.

This Article looks to Scottish law to inform consideration of how U.S. states might best reform their intestacy statutes so as to provide intestate inheritance rights to a surviving unmarried committed partner. Examination of Scottish law should prove especially fruitful for U.S. law reformers. The relevant Scottish statutory provisions have been in effect since 2006 and have been extensively critiqued by Scottish courts, academics, and practitioners. Indeed, the Scottish Law Commission (SLC), whose recommendations led to adoption of the current scheme, has called for repeal of these intestacy provisions, and has offered a replacement scheme.

The Article evaluates the Scottish statute with respect to three major issues of principle that should be at the center of U.S. reform discussions: fulfillment of purpose, implications for certainty and administrative convenience, and implications for marriage. The Article similarly evaluates the SLC’s proposal to replace the current statute. Finally, the Article reflects upon the Scottish statute and SLC reform proposal in considering which elements of Scottish law a U.S. state might profitably borrow or should reject in an effort to craft a more inclusive approach to the intestate inheritance rights of U.S. unmarried committed partners consistent with the principles of U.S. succession law. The jumping off point for this discussion is this author’s previously published proposal for a model statute that implements an accrual/multi-factor approach to intestate inheritance rights for unmarried committed partners. After describing the significant features of this proposal, the Article considers how one might evolve the proposed accrual/multi-factor approach to incorporate the lessons learned from the Scottish experience.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 17, 2017 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Definitions in Shareholder Agreements Matter When Transferring Family-Owned Business Stock

DictionaryOwners and shareholders of a family-owned corporation will often enter into contractual arrangements limiting to whom an owner may transfer their shares. Many times, these agreements provide the company or other shareholders the right of first refusal if a shareholder desires to sell their ownership stake in the company. If the language in the contract is unclear, there is potential for possible challenges to a transfer of stock.

A current case in which this was the predominant issue is Saccani v. Saccani. This California Court of Appeal decision saw two nephews challenge their uncle’s right to exercise an option to purchase their father’s stock from a trust upon his death. For the nephews, a court decision in their favor would have forced their uncle to return the stock to the corporation, granting them a one-half interest in the company instead of the one-third interest they held. The question for the court was whether the language in the contract, specifically language dealing with the term “transfer”, was defined broadly enough to allow for a transfer of stock through the exercise of an option to purchase. The court noted that the definition of the term “transfer” was very liberally defined in the original agreement and interpreted it to allow the purchase. While the uncle was the victor in both the trial and appellate courts, this case serves as a reminder that definitions are extremely important when parties draft a shareholder agreement.

See Michael P. Connolly, Definitions in Shareholder Agreements Matter When Transferring Family-Owned Business Stock, The National Law Review, August 8, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

August 17, 2017 in Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Announcing the 2017-2019 class of RPTE Fellows

PattonThe Real Property, Trust, and Estate Law (RPTE) section of the American Bar Association (ABA) sponsors a fellowship program designed to encourage young lawyers to become actively engaged in the section. The program seeks to develop these men and women into future leaders by involving them in substantive work occurring within RPTE. To accomplish this, RPTE fellows are paired with a committee chair who serves as their mentor. The mentor maintains an obligation to expose the fellow to all aspects involved in committee membership. Additionally, fellows are involved in various RPTE projects of import: writing for RPTE publications, attending leadership meetings, becoming section liaisons, and becoming engaged members of the Membership Committee are some of the tasks fellows may undertake. For the 2017-19 bar years, the following individuals have been selected to represent the RPTE section as Trust & Estate Fellows: Abigail Rosen, Caryn Friedman, Danielle Kincaid, Kelly Perez, and Jordan Veurink.

See RPTE Leadership Meeting, American Bar Association, 2017.

August 17, 2017 in Current Events, Estate Planning - Generally, Scholarship | Permalink | Comments (0)

Wednesday, August 16, 2017

Tupac's Hummer Back On Auction Block After High Bidder Flakes

H1Tupac’s 1996 Hummer went to the auction block in May 2016. An anonymous bidder from Ohio bought the heavily modified H1 for an astounding $337,000. As of yet, efforts to solicit payment have been totally unsuccessful and attempts by the auction house to find the buyer have garnered no response. RR Auctions is relisting the vehicle with an expected sale price closer to $100,000; much nearer the actual value of the SUV.

See Tupac's Hummer Back On Auction Block After High Bidder Flakes, TMZ, August 12, 2017.

August 16, 2017 in Current Events, Estate Planning - Generally, Music | Permalink | Comments (0)

CLE on Estate Administration Boot Camp

0000000 CLEThe National Business Institute is holding a conference entitled, Estate Administration Boot Camp, which will take place on Thursday, August 16, 2017 at the DoubleTree by Hilton Dallas - Love Field in Dallas, TX. Provided below is a description of the event:

Program Description

Everything You Need to Know About Effectively Administering an Estate

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client's estate is laid to rest according to the decedent's wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don't miss any crucial notice and filing requirements when opening the estate - learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.

Who Should Attend

This two-day, basic level seminar is designed for:

  • Attorneys
  • Accountants/CPAs
  • Enrolled Agents
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Key Intestacy Laws You Must Know
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Trusts That Affect Estate Administration

DAY 2

  • Income Tax Returns
  • Portability and Estate, Gift, GST Taxes
  • Business Interests in Estate Administration
  • Legal Ethics in Estate Administration
  • Closing the Estate and Final Accounting
  • Estate and Trust Contests, Disputes, Challenges

Continuing Education Credit

 

Continuing Legal Education

Credit Hrs State
CLE 12.00 -  OH*
CLE 12.00 -  TX*

International Association for Continuing Education Training – IACET: 1.20

National Association of State Boards of Accountancy – CPE for Accountants: 14.00 *

* denotes specialty credits

August 16, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Income Tax, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

More Retirement-Age Clients Facing New, Unexpected Expenses

OldSuzanne Shier, chief tax strategist at Northern Trust, noted an increasing number of Americans who are facing unexpected expenses as they close in on retirement: support for elderly parents. Many individuals hope and plan to provide some support for their children, and if possible, grandchildren. But, as the life expectancy for the average American continues to increase, more and more planning and resources are being dedicated to the support of aging parents who are still alive and relatively healthy as their children are entering into retirement.

Some individuals nearing retirement have been forced to extend their employment stay in order to accommodate expenses for parents’ costs. Others have planned a bit differently and have instead chosen to work out an arrangement with siblings to pool resources to support parents. Shier commented, “It’s an expense that people hadn’t thought much about but that more and more people are having to accommodate.”

This trend is unlikely to abate in the near future. Currently, there are over half a million people on earth over the age of 100. Data suggests that there may be upwards of 3.7 million centenarians by 2050.

See Juliette Fairley, More Retirement-Age Clients Facing New, Unexpected Expenses, Financial Advisor, August 7, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

August 16, 2017 in Disability Planning - Health Care, Estate Planning - Generally | Permalink | Comments (0)

Article on Testamentary Promises between Selflessness and Self-Interest

Altruism-830x460Alexandra Braun recently published an Article entitled, Testamentary Promises between Selflessness and Self-Interest, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Law often indicates a suspicion of gifts and, in particular, of promises to make a gift. This is principally due to a concern that such promises are made without sufficient deliberation, apparently because they benefit another person without the promisor gaining anything in exchange.

Against that backdrop, this paper investigates the role of selflessness in the context of testamentary promises, that is, of a testator’s promise to benefit someone in his or her will. It questions the assumptions that all gift promises are altruistic and that they are therefore irrational and should not be enforceable unless expressed using certain legal formalities. Drawing on the findings of sociologists, anthropologists, and economists, the paper argues that testamentary promises are often likely to be less altruistic than lifetime promises of a gift. The case law offers many instances of uses of testamentary promises that are far from purely selfless, including influencing others and exercising power over them. This paper serves, then, as a counterweight to the common story of the undeserving promisee and the frail and vulnerable promisor. It shows that testamentary promises frequently involve a degree of reciprocity that can benefit both. Ultimately, what may look like a selfless act may actually be a self-interested one.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 16, 2017 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Tuesday, August 15, 2017

Americans Are Dying Younger, Saving Corporations Billions

YoungSince 1950, death rates for Americans have improved by approximately 1% per year. 2000-2009 oversaw an acceleration of this trend with annual increases from 1.5-2%. Recently though, these gains have significantly slowed. From 2010 to 2014, death rates in American were only improving at about half a percent per year. In 2015, the first time since 1999, the US mortality rate actually increased slightly.

For most, the increasing mortality of younger Americans is bad news, but this is not necessarily the case for large companies running pension plans. The 2015 increase in the death rate has led a number of large companies to reduce the projected amount they may owe retirees. The estimated pension reduction among twelve leading companies tops a staggering $9.7 billion. This movement in the U.S. death rate is apparently significant enough for actuaries to incorporate the change into their future estimates, but the question remains as to whether the uptick is a short-term blip or a permanent shift.

See John Tozzi, Americans Are Dying Younger, Saving Corporations Billions, Financial Advisor, August 8, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

August 15, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Grieving Family Spot a Decaying FOOT Lying atop Their Grandfather's Casket in New Jersey Cemetery

CasketCleveland Butler, 85, died after suffering from a stroke while in a Brooklyn nursing home. Grieving members of his family gathered to celebrate his life and mourn his loss at a New Jersey cemetery. As Butler’s vibrantly colored casket was lowered into the ground, family members noticed a decaying foot jutting out from the adjacent grave site. Workers chose to ignore the decaying neighbor’s limb and continued with the burial.

James Shmergel, owner of Mount Holiness Cemetery, and Bill Plog, the cemetery’s caretaker, shrugged off the incident as being par for the course for the cemetery. Plog noted that the “grave is from 1969. It's unfortunate that this happened, but this is a graveyard,”

The family is currently considering pursuing legal action.

See Grieving Family Spot a Decaying FOOT Lying atop Their Grandfather's Casket in New Jersey Cemetery, Daily Mail.com, August 11, 2017.

August 15, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)