Wills, Trusts & Estates Prof Blog

Von Anhalt Gives DNA Sample

Yesterday (Friday, March 23, 2007), Frederic Von Anhalt provided a DNA sample in his attempt to prove paternity of Anna Nicole Smith's daughter, Dannielynn.  Zsa Zsa Gabor's husband is quoted as saying he is "almost sure" the test will prove his paternity.

Earlier in the week, Larry Birkhead gave a DNA sample in his quest to be Dannielynn's father.  Howard K. Stern, who is listed on as her father on the birth certificate, has yet to give a DNA sample.

See John Rogers, Van Anhalt of Anna Nicole's child: 'Almost sure the baby's mine,' AP, March 24, 2007.

Comment Reminder

Do you notice that when you post a Comment, it does not appear?  Do you post it again and again?  Then, after a while, do you notice that it suddenly appears?

This is not aberrant behavior. Instead, it is by design because comments on this blog, as well as all other blogs in the Law Professor Blog Network, are moderated.  This means that a comment will not appear until the blog editor approves the comment.  This requirement is imposed because the blog editor may be held liable for the publication of comments under the theory of publisher liability. Because of publisher liability concerns, the Law Professor Blogs Network does not allow automatic comment publishing.

I do not receive an automatic notice that someone has posted a comment.  I do check on a regular basis but if you want to get you comment posted faster, please send me an e-mail simply stating you have posted a comment.

Conditional Gift by Will

In his will, John Ellwood Hinebaugh provided that the area of land called Friend’s Delight should go to his friends, Donald and Charlotte Sebold, with the condition that they continue to farm the land. Upon their death, if they disclaimed the property, or if the failed to comply with the condition subsequent, Friend’s Delight passed “subject to the same conditions and covenants, to the State of Maryland, adding that said conditions [were] covenants running with the land.”(internal quotation omitted).  The will also contained a residuary clause leaving the residue of the estate to certain beneficiaries, including Shelley Rodeheaver.

The Sebolds disclaimed their interest in Friend’s Delight. The State filed a motion for summary judgment, which the trial court granted, saying the alienation provision was invalid and the farming provision was unenforceable. The Sebolds originally opposed the motion but settled, so only Rodeheaver was left opposing the State’s motion. She said that if the State failed to farm the land, the property would pass to the residuary beneficiaries.

In Rodeheaver v. State, 2007 WL 656605 (Md. App. 2007), the Court of Special Appeals first noted that condition subsequents are disfavored in the law because they inhibit the free transfer of land, which the law favors, and require forfeiture when the condition isn’t met, which the law disfavors. Therefore, a testator’s language of intent in creating the condition had to be clear and unequivocal, specifically stating that there should be a reversion of the property to the grantor or that the property should pass to another person if the condition was not met. Otherwise, “the condition merely expresses the grantor’s confidence that the grantee will use the property so far as may be reasonable and practicable to effect the purpose of the grant.” (internal quotations omitted).

Here, there was a condition subsequent as to the Sebolds, because the will provided that the property would then pass to the State.  However, the will did not specify to whom the property should pass, either through reversion or devise, if the State did not comply with the condition. Further, “even though [the testator] included a general residuary clause, the fact that he made no express provision for the property in the event the State fails to farm…leads to the conclusion that he did not intend to make the farming condition mandatory.” (internal quotations omitted).  A general residuary beneficiary would only obtain the property if it first reverted to the grantor.  Friend’s Delight did not revert to the grantor here because the farming condition was not mandatory on the State. Therefore, Rodeheaver and the other residuary beneficiaries were not entitled to the property.

Special thanks to Matthew B. Bogin (Rockville, Maryland) for bringing this article to my attention.

2010 Brochure on Advanced Estate Planning

Special thanks to Rob V. Robertson (attorney, Austin, Texas) who forwarded this hypothetical "advertisement" to me.

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Special Needs Trusts

Kerry R. Peck (managing partner of Peck, Bloom, Austriaco & Mitchell, LLC, Chicago) and D. Rebecca Mitchell (of counsel to Peck, Bloom, Austriaco & Mitchell, LLC, Chicago) have recently published their article entitled Helping Parents Plan for Children with Special Needs, Ill. B.J. 82 (2007), in which they "offer drafting suggestions and other tips to help parents plan, financially and otherwise, for their special needs child."

Deficit Reduction Act of 2005 & Illinois Law

In Impending Regs Affect Planning for Clients Facing Long-Term Care, 95 Ill B.J. 66 (2007), Helen Gunnarsson explains how Illinois "is on track to issue new regulations that will make it harder for clients who are headed for nursing-home care to hang on to assets."  Her article details how "[e]lder law and estate-planning practitioners need to be prepared with new strategies for the new rules."

Being A Millionaire Isn't What It Used to Be

Because of inflation, being a millionaire is not really very impressive anymore.  For example, to be a millionaire in 1957 would require over $7,000,000 in today's dollars.

This phenomena has made the status of millionaire reachable by a tremendous number of people.

According to Being a millionaire just isn't the same these days, CNN.com, March 21, 2007:

According to research from Merrill Lynch & Co. and the consulting firm Capgemini, some 2.9 million people in the United States and Canada have net worths of $1 million.

This article explains that "[n]ot that long ago, the word "millionaire" conjured up visions of chauffeured limousines and extravagant shopping trips and elegant yachts. These days, a millionaire is more likely to be the guy or gal next door who saved carefully."

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing this development to my attention. 

Dannielynn to have DNA test

Yesterday (March 20, 2007), a Bahamian judge ordered that Dannielynn, Anna Nicole Smith's daughter, undergo a DNA test.  The request came from one of the many purported fathers, ex-boyfriend Larry Birkhead.

Currently, Anna's long-time companion Howard K. Stern, who is also claiming paternity, is caring for Dannielynn in the Bahamas.

See DNA test ordered for Anna Nicole Smith's baby, CNN.com, March 20, 2007.

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing this development to my attention.

Child Born Two Years After Father's Death

Brian Smith was a lawyer who decided to make a career change at age 29 and enter the military.  He joined the Army in 2002 and served in Iraq as a tank commander until his he was killed by a sniper.

His wife, Kathleen, decided to be inseminated with sperm that Brian had donated prior to his deployment.  Being an attorney, Brian had signed the proper documents stating that Kathleen could decide to use the sperm even after his death.

Kathleen elected to do so and their son, Benton, was born about eight months ago.

See Keith Oppenheim, Soldier fathers child two years after dying in Iraq, CNN.com, March 21, 2007.

Special thanks to Precious Atlas and Sara Hudman (both May 2008 J.D. Candidates, Texas Tech University School of Law) for bringing this development to my attention.

Special Needs Trusts

Susan Mesenbrink (CTFA, CFP, Trust Officer, Wells Fargo, Seattle, Washington) has recently published her article entitled What Judges Should Look For When Considering Special Needs Trusts, J. Nat'l College Prob. Judges, Spring 2007, at 6.

Ms. Mesenbrink discusses a variety of problems with the SNTs such as when the trust evolves into the "family checking account," purchases a home, buys a van, and pays for a vacation for the beneficiary and an attendant.

Pet Trust Teleconference

A teleconference entitled Don’t Forget the Family Pet! (Pet Trusts and other Estate Planning Devices for the Care of Companion Animals) will be sponsored by the ABA Tort Trial & Insurance Practice Section Animal Law Committee, the ABA Real Property, Probate and Trust Law Section, and the New York City Bar Association Legal Issues Pertaining to Animals Committee on Thursday, April 5, 2007, 1:00 pm - 2:30 pm EST.

Here is a description of this program:

Providing for the continuing care of companion animals is an important part of an estate planning for clients with animals. Companion animals are often considered members of the family. If left to chance after the client’s death, or incapacitation, the animals may be left without proper care, or taken to a shelter where the animals may be euthanized. There are 38 states that have statutes specifying that trusts for animals are valid. However, few practitioners have drafted such trusts. This program will discuss the practical aspects of forming a pet trust, providing for the outright bequest of companion animals in a will, and also cover some ethical considerations that arise on this topic. 
 
Topics to be covered include: 

• Various estate planning tools
• Drafting key clauses in a pet trust
• Covering the costs of animal care
• Caring for long-lived animals
• Caring for animals during a pet owner’s incapacity and pre-probate
• Various ethical considerations

International Intestate Succession Laws

I have recently been made aware of a great source for comparing the intestate succession laws of various nations -- International Succession Laws (Consultant Editors: Mark Bridges and David Way) published by Tottel Publishing.

Here is the publisher's description of this book:

Written by leading practitioners from around the world, this looseleaf title is an important service for trust practitioners, lawyers, accountants and banks. Practical and accessible, it deals with: fixed rights of inheritance; recognition of trusts; treatment of lifetime gifts; recognition of foreign wills; and recognition of foreign taxes. As more countries are added with every update, this looseleaf has become the primary source of information for anyone encountering deals or situations featuring foreign succession laws. Each country's entry contains information on their particular fixed rights of inheritance, formalities and tax issues, as well as issues and matters of succession law pertaining to that particular country.

Trust Investment Rules -- Kansas Style

Justin Whitney (J.D. Candidate 2008, Washburn University School of Law) has recently published his Comment entitled Taking the Trust Out of Trustee: The Kansas Supreme Court's Standard for Reasonable Reliance Means Investors Should Proceed Cautiously When Altering the Prudent Investor Rule (McGinley v. Bank of Am., 109 P.3d 1146, Kan. 2005.), 46 Washburn L.J. 245 (2006).

Here is the conclusion of his article:

The Kansas Supreme Court held that McGinley's power to direct investments justified the Bank's failure to monitor the safety of her Enron investment.  The decision is problematic because reliance on trust instructions becomes unreasonable when a professional trustee fails to explain the effect of a waiver.   Additionally, it is unfair to rely on trust instructions as justification for ignoring the safety of directed trust investments in light of changed circumstances. Instead, a trustee should have a duty to monitor risks posed by changes in circumstances over time. The court should have imposed a duty on the Bank to evaluate and respond to the new risk of loss that developed when the Enron allocation exceeded 15%. The increase in McGinley's Enron concentration represented an unsafe change in circumstances, which the Bank had a duty to monitor and address.

Instead, the court opted not to enforce the principle of informed consent nor the duty to monitor changed circumstances.  Even more shocking, the court enabled the Bank to collect fees on an asset for which it had no responsibility to manage prudently.  Consequently, the court lowered the standard for reasonable reliance and eroded the protection afforded by the duty to serve the beneficiary's best interest. In doing so, the court also squandered the chance to stress the importance of diversification and the advantages of modern portfolio theory. While other jurisdictions have an enviable history of cases upholding the best interest of beneficiaries, the disappointing truth is that the Kansas Supreme Court missed the opportunity to do the same.

Same-Sex Adoption as Creating "Grandchild?" -- Update

Earlier on this blog, I discussed the case of Olive Watson who, in 1991, adopted her same-sex partner, Patricia Spado.  By doing so, Olive made Patricia her "child" so that she would be able to inherit from her upon Olive's death.

In 2004, Olive's father's widow died triggering trusts which provide distributions to Olive's father's grandchildren.  Patricia, as an adopted grandchild, is claiming that she is entitled to a share of the trust.

This case is now receiving national attention because the family consists of the descendants of Thomas J. Watson, Sr., the founder of I.B.M.  See Pam Belluck and Alison Leigh Cowan, Partner Adopted by an Heiress Stakes Her Claim, NY Times, March 19, 2007.

Here are a few excerpts from this article:

A guardian ad litem appointed to represent Watson grandchildren yet to be born or identified, Henry W. Pascarella, has called the women’s 1991 arrangement a “Mephistophelian maneuver of a middle-aged woman adopting her still older middle-aged female lover ‘as her child.’ ”

A Greenwich probate judge ruled against Ms. Spado in 2005, but her lawyers have appealed, contending that the trusts cannot “be construed to exclude a legally adopted grandchild of Mr. Watson solely because that grandchild was an adult at the time of the adoption.” * * *

Making this case even more complex is the fact that after the couple separated, Ms. Watson paid Ms. Spado a $500,000 settlement. Ms. Spado has contended that the money was to buy out her interest in property the women jointly owned, and should not affect the trusts. The Watson lawyers have said it was intended to put to rest further claims. After the settlement, however, Ms. Watson signed a letter affirming “our agreement that I have not and that I shall at no time initiate any action to revoke or annul my adoption of you.”

Top SSRN Downloads

Here are the top downloads from January 13, 2007 to March 14, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days:

Rank	Downloads	Paper Title
1	63	The Economics of Fiduciary Accountability Robert Flannigan, University of Saskatchewan, Date posted to database: February 15, 2007 Last Revised: February 22, 2007
2	58	Pulling a Rabbi Out of His Hat: The Bankruptcy Magic of Dick Posner Randal C. Picker, University of Chicago Law School, Date posted to database: February 26, 2007 Last Revised: February 26, 2007
3	45	The Heir-Cut of the Slave: Miscegenation and Disinheritance in Antebellum South Carolina Kevin Noble Maillard, Syracuse University College of Law, Date posted to database: January 14, 2007 Last Revised: January 14, 2007
4	20	The Vanishing Bequest Tax: The Comparative Evolution of Bequest Taxation in Historical Perspective Graziella Bertocchi, Università di Modena e Reggio Emilia - Dipartimento di Economia Politica, Date posted to database: February 7, 2007 Last Revised: February 7, 2007
5	14	One Size Does Not Fit All: A Proposal to Create a Flexible Intestacy System that Equitably Balances the Interests of the State, Marital Children and Non-Marital Children Browne C. Lewis, Univ of Detroit Mercy School of Law, Date posted to database: February 20, 2007 Last Revised: February 20, 2007

Lillian Glasser Decision

Earlier on this blog, I reported on the case of Lillian Glasser and the battle to control her and her $25 million fortune.  See here, here, here, here, here, and here.

On March 8, 2007, the Superior Court Of New Jersey, Chancery Division – Probate Part Middlesex County issued its opinion.

Here are some of the highlights of this lengthy (82 page) opinion:

• Lillian's daughter, Suzanne Mathews, must return approximately $20 million to Lillian.
• Lillian's earlier will which leaves her estate equally to her two children (Suzanne Mathews and Mark Glasser) remains effective.
• A purported later will which Lillian executed with Suzanne's assistance will be ineffective.
• Lillian is deemed incapacitated and Joseph Cantanese is appointed as her new guardian of the person and Neuberger Berman (a financial planning firm) as guardian of her estate.
• The judge severely criticized Suzanne's conduct determining that she breached fiduciary duties, exerted undue influence over Lillian, and was untruthful with the court.
• Although the judge determined that Mark acted in good faith to assist Lillian, the judge was critical of Mark's "take no prisoners" tactics and his "less than candid" testimony.

According to Zeke MacCormack, Daughter ordered to repay millions, San Antonio Express-News, March 15, 2007, Mark has "heard talk of an appeal."

Special thanks to James Woo (Davidson & Troilo, San Antonio, Texas) for being the first person to bring the Glasser opinion to my attention.