Wills, Trusts & Estates Prof Blog

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

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Thursday, September 18, 2014

Tom Clancy's Estate in Dispute

Tom clancy

Tom Clancy left behind an estate worth $83 million when he died in 2013.  Now, his widow’s lawyers are in court disputing that she should be exempt from the $6 million in taxes. 

The lawyers argue that rather than have Clancy’s widow, Alexandra, pay the taxes, the burden should shift to the four children from his first marriage.  Alexandra Clancy is the “sole or main” beneficiary of two-thirds of the estate.  Clancy’s executor previously declared that the $6 million in taxes would be paid by Alexandra’s trust.  However, her attorneys allege that Clancy modified his will a few months before his death to protect his wife from paying the taxes. 

A lawyer for the four adult children commented, “Obviously, we would hope that the original determination by the personal representative is the correct one, because it would be more detrimental to my clients if it were not.”

See Carolyn Kellogg, Tom Clancy’s $83-Million Estate Prompts Family Tax Dispute, LA Times, Sept. 18, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

September 18, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Slew of State Laws Scrutinize Surrogacy

Surrogacy

When Crystal Kelly signed a contract to bear a baby for a couple in Connecticut, a routine ultrasound five months later showed that the fetus had a cleft palate, a brain cyst and heart defects.  The couple subsequently asked Ms. Kelley to have an abortion, offering to pay her $10,000 to do so.  However, Ms. Kelley fled to Michigan, where surrogacy contracts are unenforceable and had the child.  She was listed on the birth certificate as the mother, and a family that had other special-needs children adopted the little girl. 

Although surrogacy is becoming more commonplace in the United States, it remains a polarizing issue.  Because there is no national consensus on how to handle it, states are free to do as they wish. 

Seventeen states have laws permitting surrogacy, but vary greatly in range and restrictions.  In many states, surrogacy is a taboo issue, drawing opposition from anti-abortion groups, opponents of same-sex marriage, the Roman Catholic Church, some feminists, and those who view surrogacy as an experiment with unforeseen consequences. 

Many states are now considering certain limits and trying to find middle ground.  “My sense of the big picture is that we’re moving toward laws like the one in Illinois, which accepts that the demand for surrogacy isn’t going away but recognizes the hazards and adds regulations and protections,” says Joanna L. Grossman, a family law professor at the Hofstra University Law School.  The Illinois law requires medical and psychological screenings for all parties before a contract is signed and stipulates that surrogates be at least 21, have given birth at least once before and be represented by an independent lawyer, paid for by the intended parties, thus, “eliminate[ing] some of the concerns about designer babies.” 

Lawmakers in New York, Washington D.C., and elsewhere are considering measures to allow surrogacy.

See Tamar Lewin, Surrogates and Couples Face a Maze of Laws, State by State, The New York Times, Sept. 17, 2014.

Special thanks to Jerome Borison for bringing this article to my attention. 

September 18, 2014 in Current Affairs, New Legislation | Permalink | Comments (0) | TrackBack (0)

Prince Harry Inherits Remainder of Princess Diana's Estate

Princess diana

Prince Harry, the son of iconic Princess Diana, finally turned thirty.  While this is a significant milestone in itself, it is even more momentous because Harry is now entitled to receive the remaining half of his mother’s assets.

After Diana passed away in August 1997, her mother and sister were named the executors of her estate.  The probate filings revealed that Diana left behind assets valued around £21 million (about 31.5 million in USD at the time), netting £17 million after estate taxes. Although Diana’s will called for the assets to be held in trust for her sons, William and Harry, until they turned 25, Diana’s executors petitioned the probate court for a “variance” of the will.  They successfully obtained the variance, which included a delay of the distributions to William and Harry until they each turned 30. 

Diana also addressed the distribution of her personal property in her will, directing the executors “to give effect as soon as possible but not later than two years following my death to any written memorandum or notes of wishes of mine.”  Diana wrote a Letter of Wishes, requesting all of her jewelry and three-fourths of her chattels pass to her sons, with the rest to her godchildren.  The court allowed the executors to ignore the Letter of Wishes because it did not contain certain language required by British Law and Diana’s mother and sister had discretion whether or not to honor her wishes. 

 While we can only speculate on how Diana may have felt about this, the lesson to be learned is that no one should ever rely on a letter, not or other informal writing to pass along significant assets.

See Danielle and Andy Mayoras, As Remainder of Princess Diana’s Estate Passes To Harry, Troubling  Questions Remain, Forbes, Sept. 16, 2014.

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

September 18, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Aunt Jemima's Heirs Sue for Royalties

Aunt jemima

The great-grandchildren of Anna Short Harrington, the woman known for the “Aunt Jemima” logo, are seeking $2 billion in a class action lawsuit brought against a group of companies including PepsiCo and its subsidiary Quaker Oats. 

The suit accuses the companies of failing to pay Harrington and her heirs an “equitable fair share of royalties” from the pancake mix and syrup brand that uses her image and recipes.  The suit claims that Harrington had entered into a “written contractual agreement to play the actress role of aunt Jemima,” therefore, entitling her to royalties, including a percentage of the proceeds accumulated by the brand over the years.  Quaker oats is accused of lying to cover up employment of Harrington, and the heirs subsequently determined they were owed royalties when the discovered the company trademarked the image of their great-grandmother with the U.S. Patent and Trademark Office in 1937 and after they found a death certificate for Harrington that named the company as her employer.  The heirs accuse the companies of breach of contract, conspiracy, and fraud, also alleging Quaker Oats engaged in “industrial espionage” to procure Harrington’s trade secrets before failing to compensate her estate on an annual basis following her death. 

See Tom Huddleston, Jr., ‘Aunt Jemima’ Heirs Sue Pepsi, Quaker Oats for $2 Billion in Royalties, Fortune, Aug. 11, 2014.

Special thanks to Ryan Turner (a Texas lawyer) for bringing this article to my attention. 

September 18, 2014 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Tom Clancy’s Estate Feuding Over Estate Tax

TomClancyRainbowSixThe family of the late techno-thriller author, Tom Clancy, is in the midst of a legal battle over estate taxes. Clancy’s wife, Alexandra Clancy, brought the suit in an attempt to have all taxes against Clancy’s estate, estimated to be $16 million, taken out of the share received by Clancy’s four children from a previous marriage. Alexandra Clancy claims that it was Clancy’s intention for her portion of his $83 million estate to fall under the marital exception and completely exempt her from tax liability. The personal representative for Clancy’s estate has until October 17, to respond.

See Scott Calvert, Tax Battle Brews Over Tom Clancy’s $83 Million Estate, The Wall Street Journal, Sept. 17, 2014.

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

September 18, 2014 in Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Estate Planning Considerations for a Vacation Home

Vacation HomeIt is important to remember to include the vacation home in estate planning. If treatment of a vacation home is left unspecified it can result in children becoming tenants-in-common, which can result in sibling strife. Here are four considerations for making sure the intended outcome is reached for a family vacation home:

  1. Decide what the end goal for the vacation home is, whether that is for the property to be sold or kept in the family.
  2. Find out the desires of each child regarding the property and don’t assume that all children will want an ownership share.
  3. Give some thought to whether using a trust would be beneficial.
  4. Always have a plan for selling the property, even if just as a backup plan for unexpected events.

See Tracy Craig, Estate Planning: What to do With Client Vacation Homes?, Financial Planning, Sept. 16, 2014.

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

September 18, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Is the Estate Tax Inefficient?

Tax QuestionsAn analysis of the estate tax by the Tax Foundation, concluded that it may be more beneficial and efficient to eliminate the estate tax. This conclusion is based partly on the high cost of addressing administrative needs related to the tax, and relatively low revenue created which is roughly $18 billion annually.  The analysis also suggested that eliminating the estate tax would increase capital stock and the aggregate wealth of the United States in the long run.

See Mike Godfrey, US Death Tax is ‘Poor Source for Federal Revenue’, Sept. 16, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

September 18, 2014 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Article on Estate Planning and Charitable Giving for Same-Sex Couples After United States v. Windsor

Ray PratherRay Prather recently published an article entitled, Estate Planning and Charitable Giving for Same-Sex Couples After United States v. Windsor, 28 Probate & Property No. 5 (Sept. & Oct. 2014).  Provided below is the introduction of the article:

About one year ago, the U.S. Supreme Court issued a decision in United States v. Windsor that significantly affected same-sex couples and their families. The Obama Administration has begun implementing the decision, which held that portions of the so-called Defense of Marriage Act are unconstitutional. On August 29, 2013, the IRS issued Rev. Rul. 2013-17, providing guidance on how the IRS will implement the decision. This article summarizes how the case and revenue rulings affect same-sex couples in a variety of situations, provides estate planning tips, and discusses the decision’s effect on charitable planned giving for same-sex couples.

September 18, 2014 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 17, 2014

CLE on Strategies for Using Lifetime QTIPs

CLE Photo

American Law Institute Continuing Legal Education (ALI CLE) is holding a CLE entitled, Creative Estate Planning Strategies for Using Lifetime QTIPs, on October 22, 2014 from 2:00 – 4:00 PM EDT via video webcast.  Here is why you should attend:

Lifetime QTIPs, once used infrequently, are now increasing in popularity as planners realize their benefits. In fact, the lifetime QTIP is perhaps one of the best and most under-utilized estate planning techniques.

Recent income and transfer tax law changes contribute to the utility of lifetime QTIPs, catapulting them into the mainstream for planners. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and the American Taxpayer Relief Act introduced portability and generally increased the income tax rates relative to the estate tax rates. As a result, inter vivos QTIPs can be used to ensure that higher exclusions of both spouses are used notwithstanding the order of deaths and to achieve better income tax results, but that is just the tip of the iceberg!

Lifetime QTIPs must provide a qualifying interest for life to the beneficiary spouse, notwithstanding the possibility of divorce. The panel will include a recognized expert marital lawyer to sort through the marital law implications that must be considered when establishing a lifetime QTIP.

 

September 17, 2014 in Conferences & CLE, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

A Funeral Home's Own Drive-Thru

Drive thru funeral

A funeral home in Saginaw, Michigan has added an unusual feature for mourners.  The Paradise Funeral Chapel installed a drive-thru viewing window that displays a body set up in a special area inside the building with a raised and tilted platform for the casket. 

Curtains automatically open when a car pulls up and mourners are allotted three minutes to view a body as music is played through the overhead. 

There is also a deposit opening for cars to leave donations, cards, or memory items.  Additionally, there is a retractable guest book that drive-thru mourners can sign.

President Ivan Phillips says he is trying to be sensitive to the needs of the elderly who may have mobility issues that make it difficult to get into the building.  He asserts that his drive-thru enables people who might not otherwise visit the funeral home to honor the deceased.

See Associated Press, Funeral Home Offers Drive-Thru Viewing, USA Today, Sept. 16, 2014.

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

September 17, 2014 in Death Event Planning, Elder Law, Estate Planning - Generally, Humor | Permalink | Comments (0) | TrackBack (0)