Wills, Trusts & Estates Prof Blog

Top SSRN Downloads

Here are the top downloads from February 3, 2007 to April 4, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days:

Rank	Downloads	Paper Title
1	97	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: April 5, 2007
2	94	The Economics of Fiduciary Accountability Robert Flannigan, University of Saskatchewan, Date posted to database: February 15, 2007 Last Revised: February 22, 2007
3	45	Resolving the Intergenerational Conflicts of Real Property Law: Preserving Free Markets and Personal Autonomy for Future Generations Gerald Korngold, Case Western Reserve University School of Law, Date posted to database: March 1, 2007 Last Revised: March 1, 2007
4	45	Keeping Peace in the Family While You are Resting in Peace: Making Sense of and Preventing Will Contests Judith G. McMullen, Marquette University - Law School, Date posted to database: March 2, 2007 Last Revised: March 2, 2007
5	31	Gerson: Plain Meaning and the GSTT Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: February 13, 2007 Last Revised: February 13, 2007
6	22	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
7	21	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, University of Detroit Mercy School of Law, Date posted to database: February 20, 2007 Last Revised: February 20, 2007

Plan Ahead When Cashing Out

The following excerpts are from Lauren Foster, Preparing for life after cash out, Financial Times, April 2, 2007:

When that private equity firm or strategic buyer comes knocking, it pays to have a plan: cashing out raises complex issues ranging from family wealth preservation and philanthropy to how best to invest the windfall, be it tens of millions or hundreds of millions of dollars. * * *

There are several pre-liquidity strategies that can help lower federal transfer taxes, which include the gift tax, the estate tax and the generation-skipping transfer (or GST) tax. They range from basic steps such as taking advantage of the annual gift tax exclusion-- you can make annual gifts of up to $12,000 tax-free to any number of people, with a lifetime exclusion of $1m per donor is to setting up a Grantor Retained Annuity Trust (GRAT) and making an instalment sale to a Grantor Trust. * * *

This is how a GRAT works: the business owner makes a gift of stock to an irrevocable trust and in exchange receives an annuity for the term of the trust, usually two or three years. The value of the gift for tax purposes is the difference between the amount contributed to the trust and the present value of the annuity payments the grantor will receive.

With a bit of financial engineering, an adviser can select a combination of annuity payments and trust term that will result in the present value of all future payments being equal to the amount contributed to the trust. By IRS calculations, the GRAT will have zero assets by the time the trust expires, so no gift tax is owed. * * *

Another popular tax-efficient strategy is a sale to an Intentionally Defective Grantor Trust.

With an IDGT, a grantor sells assets – say, stock in a closely held or family business, marketable securities, limited partnership interests or property – to an irrevocable trust in exchange for an instalment note with interest. This trust works best if the assets are subject to discounts in determining their fair market value and are expected to appreciate in value at a rate greater than the interest payable on the note.

When the grantor dies, only the fair market value of the note is included in the estate. This technique "freezes" the value of the assets in the estate.

Another benefit of the IDGT is that the grantor pays the income tax on any income generated by the trust. "That effectively allows the trust assets to compound tax free and the payment of the trust’s tax by the grantor is not treated as a taxable gift," says Mr Raaf, of Harris myCFO. Also, an IDGT can be used for very effective "GST" planning as the grantor can allocate his/her "GST" exemption to the trust.

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

Probate Research

Lawrence M. Friedman (Marion Rice Kirkwood Professor of Law, Stanford University - School of Law), Christopher Jay Walker (Chambers of Judge Alex Kozinski), and Ben Hernandez-Stern (Stanford University - Law School) have published their article The Inheritance Process in San Bernardino County, California, 1964: A Research Note, 43 Hous. L. Rev. 1445 (2007).  Here is a description of the article based on their earlier SSRN abstract:

Probate records are ubiquitous. Virtually every American county has records of estates of the dead. These records contain rich source material for any study of American legal and social history. They have a lot to tell us about family life, about the economy, about love and death and every aspect of life in America. Yet very few scholars have tried to tap these records. There are very few empirical studies that use as their main source probate records, probably no more than a dozen or so, and even fewer in California. This research note is a modest attempt to add to the stock of knowledge, and to document some basic facts about the probate system at work in one place and at one time (San Bernardino, California, 1964). We analyze 513 probate records - both intestate and testate proceedings - of decedents who died in 1964 and whose probate proceedings took place in San Bernardino County, California.
   
Part I of this article provides a brief historical background on San Bernardino County and the state of probate law in California in the 1960s. Part II then describes the research methodology: the sample, the data collection process, and the typical testate and intestate files. Part III outlines the findings of this research, both with respect to intestate and testate proceedings, followed by some concluding remarks.

Nina Wang Dies

On April 3, 2007, Nina Wang, the wealthiest woman in Asia, died at age 70.

Ms. Wang was the center of attention for many years after she was accused of forging her husband's (Teddy Wang) will in an attempt to gain control of his vast estate.

According to Asia's richest woman dies, Times Online, April 4, 2007,

The saga began when Teddy Wang, the multi-millionaire head of the Chinachem pharmaceuticals and property empire, was kidnapped in 1990. With no sightings, he was declared dead nine years later. By then, Nina Wang had built the family firm into a multibillion dollar concern with extensive international interests.

Three wills "signed" by Teddy Wang were produced in probate court. One, dated weeks before the abduction, left the estate to Nina Wang. Another, dated 1968, left everything to the testator’s father – and Chinachem founder – Wang Din-shin, overturning a first will, of 1960, which split the fortune between the two.

Wang Din-shin alleged that the handwritten 1990 will was a forgery and said his son’s decision to disinherit his wife in 1968 was a response to adultery. Observers were tantalised by alleged photographs of Nina Wang with a lover. Her then 91-year-old father-in-law won the case, with the judge, David Yam, ruling that he had “no doubt” that Teddy Wang’s signature was forged.

Nina Wang lost an initial appeal, but was cleared by the Court of Final Appeals in September 2005. That December, criminal charges of fraud, filed after the first – civil – case, were dropped.

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing Nina Wang's death to my attention.

Hot Topics in Estate Planning 2007 Teleconference

The American Bar Association Section of Real Property, Probate and Trust Law and the ABA Center for Continuing Legal Education is sponoring a teleconference entitled Hot Topics in Estate Planning 2007 on April 26, 2007.

Here is a description of the program:

Sharpen your skills and learn about wealth-transfer tax developments at this teleconference and audio webcast, broadcast live from the ABA Section of Real Property, Probate and Trust Law Spring Symposia in Washington, DC. 

Join our panel of renowned experts as they share their thoughts on current cases, legislation, regulations, and rulings and their importance to your practice.  The panel will reveal the significance of developing legal situations that test the boundaries of the law.

Topics will include:

• I.R.C. § 2031 and § 2032 estate tax valuation, alternate valuation of the same asset and aggregation valuation for inclusion and deduction
• I.R.C. § 2056 marital deduction qualification of IRA or qualified plan installment payments and equitable recoupment
• Gift Tax, including the impact of McCord and the Ed/Med exclusion for prepaid tuition
• Subchapter J – Private Annuity Trusts after Melnik, funding residuary charitable bequests without accelerating IRD and application of the I.R.C. § 67(e) exception to the 2% “haircut rule”

Panel members include Jeffrey Pennell, Dennis Belcher, and Catherine Veihmeyer Hughes.

Revised Uniform Anatomical Gift Act

In 2006, the National Conference of Commissioners on Uniform State Laws approved the Revised Uniform Anatomical Gift Act.  According to NCCUSL,

This act revises the earlier 1968 and 1987 Uniform Acts, which are the basis for organ donation throughout the United States. UAGA 2006 is an important update to reflect the current system of allocations of organ for transplant purposes. Without changing the basic concept that an individual may execute a document of gift to donate organs, UAGA 2006 makes the act more usable than the earlier acts are currently.

Four states, Idaho, South Dakota, Utah, and Virginia, have already enacted this statute and it is currently pending in over 20 jurisdictions.

According to Rob Stein, States revising organ-donation law, Washington Post, April 4, 2007,

While praised by transplant advocates, the model law has stirred concern among some doctors and bioethicists. Critics say it could result in people becoming donors or kept on life support against their or their family's wishes. And some worry that the measure could make doctors more hesitant about administering morphine and other drugs to make dying patients comfortable, for fear of rendering their organs useless for transplantation. * * *

Among many changes, the measure expands the list of people who can consent to an unconscious patient becoming a donor, and makes it clear that a person's decision to be an organ donor cannot be revoked by anyone else. * * *

The most controversial section deals with unconscious patients who have signed donor cards but also "living wills" or other documents that state that they do not want a ventilator or other medical care to keep them alive, which is sometimes necessary to maintain organ viability until a transplant can take place. Under the act, the donor card trumps the living will, which triggered objections from some bioethicists and doctors who care for critically ill patients. * * *

In response, the commission sent states substitute language that calls for family members or others to be consulted in such situations to try to determine what the donor would have wanted. Those states that have approved the law already, however, will have to wait until next year to amend it.

Did he or didn't he??

Yesterday on this blog, I reported that after the death his father, the Rolling Stones legendary guitar player Keith Richards mixed his dad's cremains with his cocaine.

There is now debate regarding whether this actually happened according to AP, April Fools'? Richards denies snorting ashes, April 4, 2007:

“It was an off-the-cuff remark, a joke, and it is not true. File under April Fools' joke,” said Bernard Doherty, a Rolling Stones spokesman, about Richards’ quote in NME magazine. * * *

In a statement posted on the Rolling Stones Web site, Richards said:

“The complete story is lost in the usual slanting! The truth of the matter is that I planted a sturdy English Oak. I took the lid off the box of ashes and he is now growing oak trees and would love me for it!!! I was trying to say how tight Bert and I were. That tight!!! I wouldn’t take cocaine at this point in my life unless I wished to commit suicide.”

Special thanks to David S. Luber for bringing this article to my attention.

CLE on Dealing with Trust Beneficiaries

The Cannon Financial Institute is sponsoring a teleconference on April 24, 2007 entitled Important Lessons For Trustees - How And Why To Say Yes Or No To A Beneficiary.  Here is a description of the program:

As every trust administrator knows, there are times when beneficiary requests can be granted, times when they must be denied, and times when they should be granted but only in part.  The basis for responding to a beneficiary’s request is mostly a function of the language in the trust document (including language setting forth standards for distributions and the extent of the trustee’s discretion) or the requirements of local law.  In this program, Roy [Adams] and Clary [Redd] will discuss:

• The meaning of the words “health, support, education and maintenance.”
• The effect of granting absolute discretion.
• The non-legal side of making distributions.
• Minimizing beneficiaries' negligence claims.
• Certain trustee and beneficiary rights are fixed.

New Edition of Coletta's "Workbook on Estates and Future Interests"

In May, the Second Edition of Prof. Raymond R. Coletta's (McGeorge School of Law, University of the Pacific) Workbook on Estates and Future Interests will be released by West.

Here is the publisher's description of this book:

Foundationally Framed:  This title provides a basic introduction to estates and future interests law. Designed to offer solid knowledge of the area's central concepts, it guides readers through a series of increasingly complex conveyances. Rather than merely providing a set of conclusory answers to the problems, each and every conveyance is analyzed in detail. The workbook walks the reader through each step of the analysis for each and every problem, providing a firm understanding of why the conveyance creates each particular interest.

Progressively Challenging:  The workbook begins with an analysis of the fee simple estate and builds sequentially toward more complicated interests and conveyances. The information proceeds from the simple to more complex, later problems building on the successful command of earlier material.

Organized and Helpful:  The workbook also contains an extensive glossary, numerous summary charts, and a set of review problems that test the reader's developing mastery of the material.

Cremains as a Cocaine Additive

People never stop coming up with unusual ways to use their loved ones cremains.  Recently on this blog, I discussed the use of cremains as a gasoline additive.

After the death of the father of Keith Richards, the Rolling Stones legendary guitar player, Keith mixed his dad's cremains with cocaine.

According to AP, Keith Richards Admits, 'I Snorted My Father', April 4, 2007,

"He was cremated and I couldn't resist grinding him up with a little bit of blow. My dad wouldn't have cared," [Richards] said. "... It went down pretty well, and I'm still alive."

Special thanks to David S. Luber for bringing this article to my attention.

Florida Specific Wills & Trusts Book Released

Carolina Academic Press has recently published Florida Wills, Trusts & Estates: Cases and Materials by by Elena Marty-Nelson, Eloisa C. Rodriguez-Dod, Gail Levin Richmond, Donna Carol Litman, and Jani Maurer (all professors at the Nova Southeastern University Shepard Broad Law Center).

Here is the publisher's description of this book:

This unique casebook examines wills and trusts by focusing on Florida law. The laws governing wills and trusts continue to be state-law driven despite widespread adoptions of uniform codes, such as the UPC and UTC. The authors believe there is much to be gained by studying the laws of one state as a whole, and Florida law is particularly well suited for studying this area of the law. Florida has a well developed probate code and its common law wills and trusts decisions address issues in fascinating factual situations that students find engaging. Moreover, in 2006 Florida adopted its version of the UTC referred to as the Florida Trust Code (FTC), effective July 1, 2007, making Florida a perfect platform for studying modern trusts law and practice.

Although Florida law is the focus, this casebook includes discussions of the common law from other states and uniform codes (including the UPC and UTC), particularly when they differ significantly from Florida law. Demonstrating how Florida law varies from that of other states (or uniform codes) serves a pedagogical purpose. It crystallizes the issues students will face when they practice wills and trusts by allowing them to see how other states may resolve these issues. This casebook may be productively used by students who expect to practice in Florida or in other states. Although the case or statutory law differs from state to state, the concepts and issues students will encounter and ponder are the same.

This casebook is also unique in the breadth and depth of its coverage in that it covers trusts as extensively as it does wills. That coverage recognizes modern trends in family wealth planning. It also treats topics that relate to both testate and intestate estates together. Covering topics such as disclaimers, slayer statutes, and simultaneous death together reinforces students’ understanding of the statutory rules and when the use of wills or other documents may be employed to achieve different outcomes. It introduces several related topics: durable powers of attorney and designations of health care surrogates; principal and income allocations; estate planning; and the probate process. These introductions are a useful bridge to such advanced courses as Elder Law, Estate Planning, and Probate Practice. Finally, this casebook includes wills and trusts forms, with extensive annotations provided by Northern Trust Corporation. The authors have found that students learn best when they can see various forms.

The authors designed this book to encourage students to think about the issues from the standpoint of both planners and litigators. Accordingly, they include numerous questions that require students to think about ways to draft or plan to avoid litigation. Notes accompanying cases suggest related issues and also guide students to think about even more nuanced problems.

Dannielynn's Paternity -- Update

Sensing that he would lose his challenge to DNA testing regarding the paternity of Anna Nicole Smith's daughter, Howard K. Stern dropped his appeal yesterday (April 2, 2007) in the Court of Appeal in the Bahamas.

According to Howard K. Stern Drops DNA Appeal, Showbuzz.cbsnews.com, April 2, 2007,

All three judges said that Stern had filed his challenge too late and should have raised his objections before the Supreme Court ordered DNA testing in the paternity challenge filed by Larry Birkhead, a former Smith boyfriend who claims to be the father of the infant, Dannielynn.

Justice Emmanuel E. Osadebay noted that Stern himself had agreed to DNA testing and waited until a week after the sample was taken to file the challenge. * * *

On Tuesday [April 3, 2007], the Supreme Court is scheduled to hold a hearing in the paternity case but the lawyers and officials are prohibited by Bahamian legal rules from discussing the case, even to reveal the nature of the hearing.

The Janis Progeny

Prof. Wendy Gerzog (Professor of Law, University of Baltimore School of Law) has recently posted her article entitled Janis: Two Perspectives of Basis on SSRN.  The article also appears in 114 Tax Notes 1265 (March 26, 2007).

Prof. Gerzog discusses how "[t]he Ninth and the Second Circuits affirmed the Tax Court decision in Janis but based their respective decisions on different rationales."

The Morning After

After document execution, there remains much to do "to effectuate the estate plan and optimize the result for the client and his or her beneficiaries" according to John J. Reddy Jr. and Marc S. Bekerman as detailed in their recent article entitled Essential Steps After "Finishing" the Estate Plan: Part 1--Pre-mortem Planning, Prob. & Prop., March/April 2007, at 20.

Issues covered include:

• Tax identification numbers and income tax returns
• Considerations in trust administration
• Life insurance trust considerations
• Complying with state and local law on formation of the entity
• Transfer of interests

"To Boldly Go . . . ."

On July 20, 2005, the actor James Doohan passed away at age 85.

Mr. Doohan is well-known for his portrayal of the chief engineer, Scotty, on the Enterprise, a starship traversing the universe in the television and movie Star Trek franchise.

According to 'Star Trek' actor's ashes heading to space this month, CNN.com, April 2, 2007, Mr. Doohan's ashes are now on a rocket in New Mexico set to launch on April 28.

The cremains of approximately 200 other individuals will also be on board including Mercury astronaut Gordon Cooper.

   

   

A New "Sport" -- Finding Relatives

With the advent of mail-in DNA testing kits at reasonable (about $100) prices, the "sport" of tracking down relatives is growing rapidly.

Here is an excerpt from Amy Harmon, Stalking Strangers’ DNA to Fill in the Family Tree, NY Times, April 2, 2007:

They swab the cheeks of strangers and pluck hairs from corpses. They travel hundreds of miles to entice their suspects with an old photograph, or sometimes a free drink. Cooperation is preferred, but not necessarily required to achieve their ends. * * *

Unlike paper records, which can be hard to come by and harder to verify, a genetic test can quickly and definitively tell if someone is a relative. But not all potential kin are easily parted from their DNA. Some worry about revealing family secrets. Some fear their sample could be used to pry into other areas of their lives. Some just do not want to be bothered.

Those cases inspire tactics that are turning the once-staid pursuit of genealogy, perhaps second only to gardening among American hobbies, into an extreme sport.

April is "National Donate Life Month"

President Bush has proclaimed April as National Donate Life Month.  Here is an excerpt from the White House press release:

Donating organs, marrow, and tissue is a kind and compassionate act that can protect and enhance the precious gift of life. During National Donate Life Month, we recognize the generosity of donors and raise awareness of the importance of donating.

In recent years, there has been great progress in this important effort, and the rate of organ donation has steadily increased -- helping save thousands of lives. Despite this success, more than 95,000 Americans currently await organ transplants, and hundreds more are added to the transplant list each month. My Administration strongly supports organ, marrow, and tissue donation, and we are working with public and private groups to help more citizens understand the impact of organ donation.

Americans who wish to become organ and tissue donors can register with their State's donor registry, designate their intent on their driver's license, and sign and carry donor cards, which are available at organdonor.gov. I urge all citizens to consider becoming donors and encourage all donors to inform their loved ones of their decision so their wishes can be fulfilled. Every human life holds inherent dignity and matchless value, and National Donate Life Month is an opportunity to celebrate our country's organ and tissue donors. The decision to donate the gift of life demonstrates the compassionate spirit of our Nation.

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim April 2007 as National Donate Life Month. I call upon health care professionals, volunteers, educators, government agencies, faith-based and community groups, and private organizations to help raise awareness of the urgent need for organ and tissue donors throughout our Nation.

Top SSRN Downloads

Once a week, I usually post a list of the top downloads from SSRN's Journal of Wills, Trusts, and Estates Law.  However, for the past few weeks, something has been wrong with the SSRN site -- it has not updated recent downloads since March 14, 2007.  In the past, the updates were on a daily basis (and perhaps, although I am not sure, in real time).  Once the site is working again, I will resume posting the list of top SSRN downloads.