Wills, Trusts & Estates Prof Blog

Bank of America Refuses to Cash Eighty Year Old Woman’s Bond

In April of 1984, Bette Miller and her now deceased husband Laurence entrusted their $5,000 to Rainier Bank by purchasing a bond. Because the bond on its face indicated that it would be automatically reinvested every two years, the Millers never cashed it and allowed it to accrue interest. Subsequently, Rainier Bank changed several names and owners and was eventually acquired by Bank of America. When in April of 2005 Bette Miller attempted to cash the bond, Bank of America refused, asserting that it had no records of the transaction.

According to Bank of America’s spokesperson, an unpaid bond would have escheated to the state as unclaimed property. However, the fact that Bette Miller still has the certificate proves that the bond has not been paid; the certificate must be surrendered in order for the bond to be honored. Furthermore, the State was unable to produce any records regarding the bond’s escheat. The Millers’ friend and elder law attorney speculates that Bank of America is either waiting for Bette Miller to die or for the statute of limitations to run out.

Bette Miller’s son, Greg Miller, plans to continue fighting by his mother’s side to help her recover this investment, now valued at $30,000.

See Herb Weisbaum, 'I want my money', komotv.com, Sept. 25, 2007; see also Greg Miller’s letter providing more details on this story in Family Says Bank Of America Refuses to Cash Bond Worth $30,000, komotv.com, Oct. 1, 2007.

Top SSRN Downloads

Here are the top downloads from August 7, 2007 to October 6, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days:

Rank	Downloads	Paper Title
1	118	Speak Clearly and Listen Well: Negating the Duty to Diversify Trust Investments Jeffrey A. Cooper, Quinnipiac University School of Law, Date posted to database: August 10, 2007 Last Revised: August 23, 2007
2	99	Agency Costs, Charitable Trusts, and Corporate Control: Evidence from Hershey's Kiss-Off Jonathan Klick, Robert H. Sitkoff, Florida State University College of Law, Harvard Law School, Date posted to database: August 31, 2007 Last Revised: October 1, 2007
3	40	Why Did Trust Law Become Statute Law in the United States? John H. Langbein, Yale University - Law School, Date posted to database: September 12, 2007 Last Revised: September 23, 2007
4	33	Estate Tax Exemption Portability: What Should the IRS Do? And What Should Planners Do in the Interim? Mitchell Gans, Hofstra University - School of Law, Date posted to database: September 11, 2007 Last Revised: September 26, 2007
5	26	When Informal Adoption Meets Intestate Succession: The Cultural Myopia of the Equitable Adoption Doctrine Michael J. Higdon, University of Nevada, Las Vegas, Date posted to database: August 28, 2007 Last Revised: August 28, 2007
6	21	Designating Health Care Decision-Makers for Patients Without Advance Directives: A Psychological Critique Nina A. Kohn, Jeremy A. Blumenthal, Syracuse University - College of Law, Syracuse University - College of Law, Date posted to database: August 31, 2007 Last Revised: September 25, 2007
7	20	The Uniform Acts' Loophole in Fraudulent Conveyance Law Adam J. Hirsch, Florida State University College of Law, Date posted to database: September 15, 2007 Last Revised: September 26, 2007
8	11	International Perspective on Intestacy Practices: Lessons for India Siddhartha Shukla, National Law University, Jodhpur, Date posted to database: July 21, 2007 Last Revised: July 23, 2007

Making Sure the Settlor's Intent Regarding Diversification is Effectuated

Jeffrey A. Cooper (Associate Professor of Law, Quinnipiac University School of Law) has recently posted on SSRN his article entitled Speak Clearly and Listen Well: Negating the Duty to Diversify Trust Investments.  This article also appears in 33 Ohio N.U.L. Rev. ___ (2007).

Here is the abstract of his article:

In American trust law, the settlor's intent is the "polestar" governing all aspects of trust management, including investment management of trust funds. By their own terms, the Uniform Prudent Investor Act (the "UPIA") and other modern laws governing the prudent investment of trust funds take a secondary position to the intent of the settlor, merely providing default rules that the trust document may negate.

Despite this backdrop, a recent series of cases have demonstrated that trust settlors often fail in their efforts to trump default provisions of trust law and establish customized guidelines for the management of investments. A number of these recent cases share a common fact pattern: a settlor funded a trust entirely or disproportionately with his most successful lifetime investment, such as common stock in his former employer or another favored company. In all of these cases, courts held that the settlor did not effectively negate the trustee's default duty to diversify the trust's investment assets.

These recent cases raise the question of how a modern trust settlor who wishes to override default provisions of trust investment law can do so most effectively. My answer is that both settlors and judges can take steps to better effectuate settlors' intent on investment management issues. Trust settlors (and their counsel) must do a far better job of clearly documenting decisions to override default investment law. Judges must accord greater deference to trust settlors' freedom to reject default trust laws and be far more proactive in their efforts to understand, and evaluate, the significance of trust language.

Put simply, trust settlors must speak with clearer voices, while judges charged with trust interpretation and oversight must listen more carefully.

Statutory Surrogate Statutes Analyzed

Nina A. Kohn (Assistant Professor of Law, Syracuse University College of Law) and Jeremy A. Blumenthal (Assistant Professor of Law, Syracuse University College of Law) have recently posted their article on SSRN entitled Designating Health Care Decision-Makers for Patients Without Advance Directives: A Psychological Critique.

Here is the abstract of their article:

States' default surrogate statutes allow family or friends to make health care decisions for incapacitated patients who lack advance directives. Although such statutes are commonly justified on the grounds that they honor the wishes of incapacitated persons, our review of empirical research on surrogate decision-making challenges this justification. We find that default surrogate statutes do a reasonable job of capturing majority preferences for health care decision-making processes, but do not ensure that patients receive the treatment they would have selected for themselves if able. Rather, surrogates appointed under default surrogate statutes can be expected to frequently make treatment choices that are inconsistent with patient preferences. Nevertheless, in the absence of better alternatives, default surrogate statutes play an important role in the American health care system. We therefore urge states to consider certain statutory changes that would improve the ability of such statutes to effectuate patient wishes. We also identify several avenues for further empirical research that could help to improve the accuracy of surrogate decision-making.

Parents Leave a $3 Million Family Farm to Charity

Christine Gill was shocked to find out that her parents had disinherited her from their will and left their $3 million family farm to Royal Society for the Prevention of Cruelty to Animals. This news was particularly stunning because Gill had devoted most of her life to taking care of the farm, and later, of her elderly parents. She based her school and career decisions on the ability to care for the family enterprise. To Gill, loosing the farm is like having her heart and soul ripped out.

Gill always thought that the farm would remain in the family, and her parents never gave her any indication to the contrary. It was not until after her mother’s death in August of 2006, that Gill found out the provisions of her parents’ will. She is now fighting for the farm by filing an appeal under the British 1975 Inheritance Act. RSPCA stated that while they could not comment on the details of this case, they were aware of Gill’s claim and were hoping to resolve matters without reverting to litigation.

See Paul Sims, Daughter's shock as parents' £1.5m farm is left to the RSPCA, dailymail.co.uk, Oct. 4, 2007.

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

September 17, 2007 Discussion Draft of UPC Amendments

The September 17, 2007 discussion draft of amendments to the Uniform Probate Code are particularly focused on issues related to children born through assisted reproduction.

The draft appears to provide that donors of gametes are not parents for purposes of intestacy (and, under the UPA, gamete donors aren't parents for other purposes either).

It also appears to provide that in most situations (except adoption by a stepparent or relative), an adopted child cannot inherit from his or her genetic parents.

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

ACTEC Announces Mary Moers Wenig 2008 Student Writing Competition

The American College of Trust and Estate Counsel has officially announced the Mary Moers Wenig 2008 Student Writing Competition.

Here are some of the key features of this competition which has a First Place Prize of $5,000:

• A broad range of topics in the trusts and estates and related taxation areas
• Attractive page requirements -- the body of the paper must be 20 double-spaced pages and may not exceed 30 double-spaced pages
• Use of original (but unpublished) papers, including papers prepared for law school credit
• May 1, 2008 deadline which will allow for work over semester and spring breaks
• No limit on the number of Honorable Mention Prizes allowing entrants to have a greater chance of receiving recognition and monetary awards
• Papers may be coauthored

The official rules may be found here.

Admission Price to Forbes 400 Exceeds One Billion

"A billion dollars is no longer enough" – announced forbes.com in reference to the requirements for becoming one of the wealthiest 400 Americans. The price of this year’s admission is 1.3 billion, which is a $300,000 increase from last year’s benchmark. The current collective net worth of these America’s most affluent individuals is $1.54 trillion.

While new and young members, such as a former Enron trader John Arnold, have joined Forbes 400 this year, seven members from last year’s list have passed away. These now deceased plutocrats include Wal-Mart founder’s wife Helen Walton, media tycoon Barbara Cox Anthony, real-estate magnate Leona Helmsley, and W. Duncan MacMillan, the heir of Cargill.

See Forbes.com, A mere billion isn't so rich anymore, MSN.com, Sept. 20, 2007.

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

Digital Wills -- Good, Bad, or Ugly?

The State of Nevada, caught up in the tech boom at the end of the last century, saw the writing on the wall.  The legislators envisioned a world where an electronic will could replace, or at least be an alternative to, the traditional paper will.  Two major requirements of the electronic will were biometric authentication and software to ensure there was only one authoritative copy of the will and that any changes be readily identifiable.  Since the Nevada statute was enacted, biometric authentication systems have been developed that meet the statutory requirements.  However, the authentication software has still not been developed, with the result being that the Nevada statute, passed more than six years ago, has never been implemented and it is unlikely that it will ever be used unless the requirements are relaxed.

This statute and other matters relating to electronic wills are discussed in Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law, Texas Tech University School of Law) & Claire G. Hargrove (Associate, Barton, Schneider and East, LLP, San Antonio, Texas), Digital Wills: Has the Time Come for Wills to Join the Digital Revolution?, 33 Ohio N.U.L. Rev. 865 (2007).

The question posited by this article is whether the time has come to bring wills into the digital age.  A will is often the most important document an individual ever executes.   This document is also more likely to be the subject of litigation than any other legal instrument and therefore should be prepared in such a way as to ensure that the wishes of the testator are carried out.   Because the period of time between executing a will and having it probated often spans decades, preservation of the physical representation of the testator’s dispositive desires is essential to carrying out his or her wishes.  This article traces the development of the physical manifestation of a will from the earliest times to present day and discusses whether, as we move into the electronic age, the paper will should be replaced, or at least supplemented, by a will in digital format.  A brief discussion of electronic trusts is also included.

If you would like a reprint of this article, please let me know (supplies are limited).

Roski Case Analyzed

Prof. Wendy Gerzog (Professor of Law, University of Baltimore School of Law) has recently posted her article entitled An Attempt to Legislate? on SSRN.

Here is the abstract of her article:

The Tax Court held in Roski that the government's imposition of certain pre-requisites for closely held businesses and farms to seek estate tax relief was an attempt by it to legislate. Was it?

Prof. Gerzog's article also appears in 117 Tax Notes 59 (Oct. 1, 2007).

Fight to control Marilyn Monroe's images rages on

How much control should the estates (heirs and beneficiaries) of a deceased celebrity have over the use of the decedent's persona property?  This battle is now being fought over the use of images of Marilyn Monroe.

The following excerpts are from Laura Parker, Court cases focus on famous faces, USA Today, Oct. 2, 2007, at 1A and Laura Parker, Photographers' heirs seek a cut of Monroe fortune, USA Today, Oct. 2, 2007, at 4A.

The use of Marilyn Monroe's iconic face to sell merchandise has prompted her only heir to push for laws giving estates of deceased celebrities sole control over marketing their famous personas.

The feud is playing out in New York and California. It pits the rights of estates to approve any use of the celebrity's image against the First Amendment right to use images and words of famous people for purposes such as research and art. * * *

In New York, the right to market the images dies with the celebrity. A bill to hand estates power over the images stalled, despite support from Al Pacino, Yoko Ono and the estates of Babe Ruth and others. * * *

In California, where lawmakers are more sympathetic to entertainment industry issues, newly passed legislation clarifies and expands a state law that allows estates to control the marketing of deceased celebrities' images. Gov. Arnold Schwarzenegger has not said whether he will sign the bill. * * *

The central issue in the court fight revolved around a basic question: Did Monroe live in California, where estates' rights to market the images are protected by state law, or in New York, where estates' control over such images dies along with the subject?

Judges in both states settled the issue without answering that basic question.

Study Shows Outsourcing Back-Office, Technology and Support Services Decreases Foundations’ Operating Expenses

Foundation Source, a leading provider of outsourced services for private foundations, recently conducted a study to determine the most cost-effective approach to private foundation administration. According to their study, the outsourced model is the most efficient. Here are some of the highlights of this study:

• Average Operating Costs as a percentage of Total Foundation Assets were lower across the board for foundations choosing an outsource services model.
• Foundations of all asset ranges: Operating costs for foundations outsourcing to Foundation Source were 26% lower than costs reported by all U.S. Foundations.
• Foundations with assets under $50 million (97.1% of all foundations): Operating costs for foundations outsourcing to Foundation Source were 50% lower than costs reported by comparably-sized U.S. foundations.

See Foundation Source, New Operating Cost Benchmark Established for Private Foundations, foundationsource.com, Sept. 18, 2007.

Importance of Pets in a Client's Life

Many times on this blog, I have discussed estate planning for pet owners.  In Natalie Angier, The Ambivalent Bond With a Ball of Fur, NY Times, Oct. 2, 2007, the author explains her own feelings as she coped with the death of Cleo, her pet cat.  She also explains that:

Pets are growing ever more popular. In 1988, according to the American Pet Products Manufacturers Association, 56 percent of American households had a pet. By 2006, that figure had climbed to 63 percent, which works out to a national census of 88 million owned cats, 75 million dogs, 16 million birds, 14 million horses, 142 million fish, assorted small mammals and the occasional leopard or Madagascan hissing cockroach.

We love our pets and we love the idea of pets, of reaching beyond the parochial barriers of the human race to commune with other species. * * *

So we adore our pets and lavish time and money on them. Annual pet expenditures in this country have doubled in the last decade and are now more than $40 billion a year. And then we scold ourselves for our foolish fiscal priorities. * * *

I understand the ambivalence of the human-animal bond. I loved my cats, and I miss them, but I resent them, too, for showing me what a creature of small habits I am, and for reminding me that even love is not enough.

More on the English Inheritance Tax

Earlier on this blog, I discussed the English inheritance tax.  The tax is currently undergoing heated debate as reported in Patrick Wintour & Will Woodward, Election battle lines drawn as Tories defend tax plans, Guardian, Oct. 2, 2007.  Here are some excerpts from this article:

The Conservatives' flagship policy on inheritance tax was under sustained attack last night as independent experts and a Treasury analysis raised questions over whether it could be funded properly by hitting a wealthy elite with a flat-rate charge of £25,000. Labour claimed the hole in the Tory figures could be as large as £3bn.

Amid new signs that an election could be announced next Monday, George Osborne, the shadow chancellor, sought to regain the political initiative by announcing that the threshold for inheritance tax would be raised from £300,000 to £1m. * * *

The cuts, he told his party's annual conference in Blackpool, would be funded by charging a levy from so-called non-domiciles, such as foreign City workers and the super-rich, who register offshore and avoid paying tax. To rapturous applause, Mr Osborne said: "We will take 10 million people out of these taxes on aspiration. For millions of people, today sounds the death knell for death taxes."

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

Donors’ Intent Jeopardized in "Orphan" Trusts

As donors die and no one is left to ensure fulfillment of their wishes, trustees can veer away from donors’ intent in distributing trust assets. For example, a donor may entrust his or her fortune to a small bank in donor’s home town for the purpose of giving back to the community. After donor’s death, a merger may occur, changing the composition of the decision makers. As a result, the trust’s annual donations often decrease, simultaneously increasing the trust value along with the proportionate trustee fees.

Orphan trusts taken over by large financial institutions are also in danger of self-dealing by the trustees. As new entities gain control of the donations, they have discretion not only over the way the money is distributed but also the selection of the beneficiaries. For example, foundation administrators have given money to their alma maters, universities where they teach, and private schools where their grandchildren are enrolled. Such acts boost a trustee’s image but are often incompatible with the wishes of the donor.

Another trend in modern philanthropy is making fewer but larger grants. This reduces administrative costs of managing the trusts; however, this practice also takes trust benefits away from a multitude of smaller institutions.

See Stephanie Strom, Donors Gone, Trusts Veer From Their Wishes, NYTimes.com, Sept. 29, 2007.

Special thanks to Alfred Brophy (Professor of Law, University of Alabama School of Law) and for bringing this episode to my attention.

North Carolina Central Law School Needs Spring 2008 Visitor

North Carolina Central University Law School (Durham, NC) has an unanticipated need for a visitor for the Spring 2008 semester.  Here are the details as provided by David A. Green, Associate Dean for Academic Affairs:

One of our professors here at NCCU has informed my Dean that for medical reasons she will be unable to teach Decedents' Estates. We are in need of someone that would be interested and willing to visit our law school to teach Decedents' Estates I and II for the Spring of 2008. Interested persons please contact Associate Dean David A. Green, dgreen@nccu.edu 919-530-7161.

• 8020 DECEDENTS' ESTATES I (3 credits) -- An examination of the substantive law of intestate succession, wills, and trusts. Topics covered include the execution, revocation, and construction of wills and trusts, and the protection of family members against disinheritance.

• 8120 DECEDENTS' ESTATES II (3 credits) -- Pre-requisite: Decedents' Estates I. An examination of the law of future interests, including rules regarding class gifts, powers of appointment, and the Rule against Perpetuities.

Woman gives birth to her grandchildren

Under Brazilian law, a person may serve as a surrogate mother only if she is closely related to the donor. 

Claudia Michelle de Brito had difficulty conceiving and thus asked her mother, Rosinete Palmeria Serrao, to serve as her surrogate mother.  Rosinete had four of Claudia's embryos implanted in her.

On September 27, 2007,  Rosinete gave birth via Cesarean section to twin boys.  Thus, she is the birth mother of her two grandchildren.  The potential estate planning issues triggered by this situation could be tremendous!

See Surrogate Gives Birth to Her Own Twin Grandsons in Brazil, FoxNews.com, Sept. 30, 2007.

Special thanks to Mark Killingsworth (J.D. Candidate, Texas Tech University School of Law) for bringing this article to my attention.

Harvesting sperm from almost dead man raises legal and ethical issues

On September 9, 2007, 23 year old Daniel Christy was involved in a motorcycle accident and became brain dead. Because both Christy and his fiancée, Amy Kruse, planned to have children, she wanted to carry out this plan after his death. However, when Christy’s parents requested the hospital to harvest their dying son’s sperm to give to Kruse, they ran into a myriad of impediments. The University Hospital’s ethical issues subcommittee could not agree on whether to allow the procedure. According to one clinical ethicist, retrieving sperm from a dying man is rarely justified because his posthumous reproduction desires are often unknown.

The Christys obtained a court order to allow collection of their son’s sperm; but, even then their battle was not over. Because the hospital was seldom faced with a need of removing sperm from dead or dying patients, it had not established a clear procedure for such occurrences. While the hospital would retrieve the sperm, it would not store it, thus requiring the Christys to find a permanent storage facility before performing the procedure. After many futile attempts in locating such a facility on short notice, the Christys were finally successful. The hospital staff collected the sperm, turned off the respirator and Daniel Christy died shortly thereafter.

See Jennifer Hemmingsen, Racing against time, man's sperm harvested before he dies, gazetteonline.com, Sept. 15, 2007.

Special thanks to Graham Smith (lawyer, Austin, Texas) for bringing this article to my attention.

Gun Trust Lawyers Needed

The following message is posted as a courtesy for David Goldman, the author of the Florida Estate Planning Lawyer Blog.

As a Florida Estate Planning Lawyer who has created Gun Trusts or National Firearms Trusts for many individuals in Jacksonville Florida and around Florida, I am often asked for names of Attorneys and Lawyers in other states who can help them create a NFA Gun Trust at a reasonable price.

As a result I have begun creating a list of Lawyers in other states who will produce Federal Firearms Gun Trusts. Some have created their own trusts, others will modify the one I am using for the specific laws in their states.

If you are an Estate Planning Lawyer and would be interested in helping others create Gun Trusts, or you are looking for an attorney in another city or state to help you create a NFA Living Trust please contact me * * * at dgoldman@woodatter.com.

Top SSRN Downloads

Here are the top downloads from August 2, 2007 to October 1, 2007 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days:

Rank	Downloads	Paper Title
1	106	Speak Clearly and Listen Well: Negating the Duty to Diversify Trust Investments Jeffrey A. Cooper, Quinnipiac University School of Law, Date posted to database: August 10, 2007 Last Revised: August 23, 2007
2	79	Agency Costs, Charitable Trusts, and Corporate Control: Evidence from Hershey's Kiss-Off Jonathan Klick, Robert H. Sitkoff, Florida State University College of Law, Harvard Law School, Date posted to database: August 31, 2007 Last Revised: September 21, 2007
3	28	Estate Tax Exemption Portability: What Should the IRS Do? And What Should Planners Do in the Interim? Mitchell Gans, Hofstra University - School of Law, Date posted to database: September 11, 2007 Last Revised: September 26, 2007
4	28	Why Did Trust Law Become Statute Law in the United States? John H. Langbein, Yale University - Law School, Date posted to database: September 12, 2007 Last Revised: September 23, 2007
5	24	When Informal Adoption Meets Intestate Succession: The Cultural Myopia of the Equitable Adoption Doctrine Michael J. Higdon, University of Nevada, Las Vegas, Date posted to database: August 28, 2007 Last Revised: August 28, 2007
6	18	Designating Health Care Decision-Makers for Patients Without Advance Directives: A Psychological Critique Nina A. Kohn, Jeremy A. Blumenthal, Syracuse University - College of Law, Syracuse University - College of Law, Date posted to database: August 31, 2007 Last Revised: September 25, 2007

Proving You are Alive -- Not an Easy Task!

Proving that someone is deceased is relatively easy -- a corpse or a death certificate usually does the job.

But as Jeremy  Bass from Moscow, Idaho recently discovered, it is very difficult to prove that you are alive.

Jeremy recently received a letter declaring that he was dead and a phone call from the sheriff's department inquiring about the mechanism of his death.

The problem arose when a man with a similar name (same first and last names but a different middle name) died at a local medical center.

Now, Jeremy is fighting with the hospital who wants him to pay for the expenses of their unsuccessful life-saving treatment of the similarly named man.

See Man Fights To Get "Life" Back After Being Declared Dead, CityNews.ca, Sept. 28, 2007.

Special thanks to Cory McDowell (J.D. Candidate, Texas Tech University School of Law) for bringing this article to my attention.

Abrogating Common Law Marriage in South Carolina Can Bring Positive Outcomes

Ashley Hedgecock (J.D. Candidate 2008, University of South Carolina School of Law) has recently published her comment entitled Untying the Knot: The Propriety of South Carolina's Recognition of Common Law Marriage, 58 S.C. L. Rev. 555 (2007).

Here is the synopsis of her comment as posted on the South Carolina Law Review website:

South Carolina is among a dwindling minority of jurisdictions that continues to recognize common law marriage. The Note explores the history of the common law marriage doctrine in South Carolina and the need for the doctrine in contemporary society. After balancing the expectation interests of couples engaging in common law marriage relationships with the costs imposed by the doctrine, the article argues that South Carolina should abolish common law marriage in order to promote judicial efficiency, protect third parties, and provide couples with a bright line rule regarding their legal rights.