Wills, Trusts & Estates Prof Blog

The Hot Areas in the Legal Profession

According to the December 2007 RDA Legal Communique ... report by Robert Denney Associates, Inc., Estate Planning & Administration are currently two of the “hot” areas of the law.

The report proposes that high demand is due to the fact that Baby Boomers are starting to retire.

"The Law of Succession in the 21st Century" Conference

As I reported earlier on this blog, The Law of Succession in the 21st Century conference will be held February 8, 2008 at the UCLA School of Law.

This symposium was organized by a subcommittee of the ACTEC Legal Education Committee and is sponsored by the ACTEC Foundation.

You can follow this link to learn more details about this symposium.

Generation-Skipping Transfer Tax and IRS Regulations

Julie Kwon, (Attorney at Law, McDermott Will & Emery LLP) has recently published her articles entitled Qualified Severances for GST Tax Purposes - Final and Proposed Regulations issued August 2, 2007, RPPT eREPORT (2007).

Here is a summary of her article as posted on RPPT eREPORT:

Julie Kwon thoroughly summarizes IRS Final and Proposed Regulations concerning the qualified severance of trusts for Generation-Skipping Transfer Tax planning purposes.

Fall Issue of Penn State’s Elder Law and Consumer Protection Clinic News

Penn State’s Dickinson School of Law Elder Law and Consumer Protection Clinic is now in its seventh year of operation. Its students “represent older adults on referrals from central Pennsylvania’s Area Agencies on Aging.”

The Fall 2007 issue of the clinic's newsletter is now available on-line so you may read about the activities of this valuable clinical program.

Special thanks to Katherine C. Pearson (Professor of Law, The Dickinson School of Law) for making this newsletter available for my readers.

New IRS Rules on Charitable Deductions Make Philanthropy More Difficult

The following is from Samuel L. Braunstein and Carol F. Burger, The IRS Gets Less Charitable, Dec. 2007:

Generosity is a noble trait shared by many Americans. Traditionally, this generosity has been rewarded with favorable tax treatment by the Internal Revenue Code and Internal Revenue Service regulations, primarily in the form of deductions pegged to qualifying charitable contributions of cash or property.

But the federal tax laws are getting stingy in their treatment of charitable donations***

A number of restrictions on deductions for charitable donations are contained in the Pension Protection Act of 2006.****

Taxpayers who seek deductions for their contributions to charities aren’t the only ones dealing with tougher tax guidelines. Charities themselves also must navigate through that more complex tax environment.***

Few if any charitable organizations are likely to abandon their missions under the growing burden of government regulations, nor should they expect to lose the support of donors. At the same time, their task sure isn’t getting any easier.

Attorney Wins a Case on Behalf of Gay Man to Inherit Under California's Domestic Partner Law

According to: SF Attorney Drexel A. Bradshaw Successfully Represents Gay Man Against Partner's..., reuters.com, Nov. 29, 2007:

In a potentially landmark case, San Francisco Attorney Drexel A. Bradshaw has won a case on behalf of a Gay man whose rights to inherit under California's Domestic Partner Law had been challenged by the family of his deceased domestic partner. The deceased man's siblings had forced their brother to execute a new trust -- cutting out his partner of 14 years -- while the man was schizophrenic, on narcotics, and in the final stages of battling cancer. Bradshaw's successful litigation charged that the family had attempted to unlawfully overturn the man's will while he was in not in a mental state to do so.***

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

Federal Estate Tax Changes and their Effect on the States

Sarah E. Nutter, (Associate Professor of Accounting, George Mason University School of Management) has recently posted on SSRN her article entitled State Estate, Inheritance, and Gift Taxes: Uncertainty at the Federal Level Passes Down to the States.

In this article the author looks at the effect federal "death" tax changes have had on the states.

Key Characteristics of a Well-Run Foundation

Foundation Source has just published an informative booklet called Hallmarks of a Well-Run Foundation. The guidebook points out the key areas that we see in the most well-run foundations.

Key topics include:

• Governance Practices
• Investment Options and Policies
• Operations and Administration
• Mission and Grantmaking Activities
• Compliance Requirements

Special thanks to Michael Hogan (Sr. Managing Director, Foundation Source) for bringing this booklet to my attention.

Living Wills in Ireland

Liz Campbell, (Lecturer, University of Aberdeen School of Law) has recently posted on SSRN her article entitled The Case for Living Wills in Ireland.

Here is an abstract of her article:

Exceptionally difficult philosophical and ethical questions arise vis-à-vis living wills. By exploring these contentious issues, this article seeks to establish whether legislation providing for living wills should be enacted in the Irish context. At present, the relevant jurisprudence indicates that such documents would be respected by the Irish courts. Nevertheless, the complexity of the issue and the need for a specific delineation of the scope of these instruments suggest that legislation may be desirable in this regard. In considering whether legislation providing for the enactment of living wills should be introduced in Ireland, this article explores the conflict between the right to autonomy and best interests, the notion of personal identity, and the author's lack of knowledge of future experience and interests.

Preventing Trust Litigation

With $45 trillion expected to be transferred to heirs and charities via estates in the next 50 years, trust mismanagement and litigation are a growing concern.

George Raine, Too many err when providing for heirs, sfgate.com, Nov. 25, 2007, describes solutions offered by Barbara Suzanne "Sue" Farley, who has practiced law for more than 30 years, specializing in trusts and estates litigation.

For several years, Farley, of Piedmont, and software developer Ernest Freeman of Oakland have worked together on software and the architecture of an enterprise system that financial institutions could employ in administering trusts, as well as a template for consumers who could be precise about how assets are to be distributed.***

Farley's five steps to disaster-proof your estate plan

• Communicate with your heirs about the details of a trust or will.
• Ensure there is accountability in a trust, which means an accounting and written report is required of a fiduciary annually.
• Do not grant broad authority to your trustee.
• Establish a standard of performance for investments for a trustee to meet.
• Empower your beneficiaries

IRS Says Topfer Owes 65 Million in Gift Taxes

The following is from Janet Novack, Short Arms?, forbes.com, Dec. 24. 2007:

The Internal Revenue Service says that Morton L. Topfer, one of FORBES ASAP's Tech's 100 Highest Rollers when he served as Dell*** vice chairman, owes $65 million in gift taxes and penalties for undervaluing asset transfers benefiting his heirs.***

The feds say that in 2002 and 2003 he put $105 million of cash and stock into trusts for his children and grandchildren but valued the largesse at a mere $3.5 million.***

Court filings for Topfer,*** defend the complicated dealings as "bona fide, arms-length transactions."

Family Limited Partnership – A Useful Estate Planning Tool

Stephanie Loomis-Price (Attorney at Law, Baker Botts LLP) has recently published her articles entitled Family Limited Partnerships, RPPT eREPORT (2007).

Here is a summary of her article as posted on RPPT eREPORT.

Stephanie Loomis-Price offers a detailed outline of the Family Limited Partnership – from consideration of the FLP as an appropriate estate planning tool, through the formation of the partnership, concluding with the administration of the partnership and tax compliance issues.

Baby Boomers and Social Security Retirement Benefits

Francine J. Lipman, (Professor of Law, Chapman University School of Law) has recently posted on SSRN her article entitled Shrinking Boomer Social Security Retirement Benefits.

Here is an abstract of her article:

In 2008, the oldest of 78 million baby boomers will celebrate their 62nd birthdays. Before they blow out their birthday candles, they will have considered and likely decided whether to elect to take early Social Security retirement benefits (SSRBs). Recent and evolving changes in the normal retirement age under Social Security, Medicare premiums and increased exposure to income tax costs have reduced the net cash flow many senior boomers will enjoy from SSRBs. Because of the overall lack of transparency in the Social Security benefits formula and the complex interplay of continued work, Medicare, taxes, and the various timing-options, many boomers are unable to make informed decisions about critical retirement matters. This article presents these issues to assist in making informed retirement decisions.

Dying in Peace and With Dignity

In his book The Best Way to Say Goodbye, Dr. Stanley Terman examines the process of death from multiple perspectives. He proposes a peaceful and dignified way of dying when a person is in a minimally conscious state, or perhaps suffering from Alzheimer’s or dementia. Dr. Terman proposes that one can make his or her final wishes known though a clearly set out and legally enforceable proxy directive.

In this enlightening, engaging, and easy to follow book, Dr. Terman provides practical advice on how to avoid protracted litigation resulting from unclear proxy directives.  According to Dr. Terman, “To Delay is To Deny.”  He gives valuable advice ranging from factors to consider in selecting a proxy to anticipating possible changes in the law or pitfalls in its interpretation. 

Dr. Terman uses a belt and suspenders approach in explaining why a “Directive to Physician” or “Living Will” may be insufficient to ensure full compliance with a person’s last wishes. The book also provides useful forms which estate planning attorneys can use as a guide in preparing their clients’ documentation.

Celebrities and Posthumous Right of Publicity

According to Robert L. Moshman, Esq., Publicity Rights...and Wrongs, Est. Analyst (Dec. 2007), deceased celebrities may not always have posthumous rights of publicity:

In recent years, the descendants of four deceased photographers who had taken pictures of Marilyn Monroe have filed lawsuits to sell the images they inherited.***

On May 4, 2007, a Federal judge in New York ruled that Monroe’s rights of publicity ended at her death. The inherited photographs can be sold and used.***

Anna Nicole Smith was channeling Marilyn Monroe in many ways during life[.]***

Anna Nicole Smith may not achieve the icon status of Marilyn Monroe, but the merchandising of her posthumous publicity rights and invasion of her privacy reflects our culture's voracious appetite for notoriety.

My Will

A humorous will-related video by Bob Noone & the Well Hung Jury has been posted on youtube.com.

The video is a parody of My Guy, My Girl by Diana Ross and describes a familiar situation where children start showing particular interest in their rich elderly parents in an effort to secure their inheritance.

Special thanks to Neda Jahansouz (J.D. Candidate, Texas Tech University School of Law) for bringing this video to my attention.

Will wife get her husband’s estate notwithstanding his will?

Seth Tobias, a wealthy investment manager, was found floating face down in his pool, dead; his wife is now accused of murder.

Andrew Ross Sorkin, A Lurid Aftermath to a Hedge Fund Manager’s Life, NYTimes.com, Dec. 4, 2007, reports:

Mr. Tobias, who was 44 years old, had apparently suffered a heart attack[.]*** The police did not consider his death suspicious.

But now an unfolding drama over Mr. Tobias’s estate is providing a lurid account of fast money and faster living in the volatile world of hedge funds. Mr. Tobias’s four brothers and Mrs. Tobias are locked in a legal battle over the estate, which is worth at least $25 million. And, in a civil complaint, they have gone so far as to accuse her of murder.***

At the center of the dispute is Mr. Tobias’s will, which designates his brothers as beneficiaries but does not name Mrs. Tobias.***

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

Is Trouble in trouble?

As you may remember, Leona Helmsley left $12 million to an inter vivos trust which is reported to contain provisions for the benefit of her pet dog, Trouble.

Here are the latest developments on Trouble from Rich US dog hiding after threats, news.bbc.co.uk, Dec. 4. 2007 (see also Millionaire dog flees death threats, Yahoo!News, Dec. 3, 2007):

Trouble, a white Maltese that belonged to the billionaire until her death in August, was flown by private jet to Florida, the New York Post reported.

It says the tiny bitch was whisked away under an assumed name after receiving about 20 threats.***

John Codey, who manages the dog's trust fund, told US television network CBS last week the cost of Trouble's security, medical care, chef-cooked meals and grooming was about $300,000 (£145,000) a year.***

When Trouble dies, any remaining money from the pet's trust will go to the charitable foundations that inherited most of the hotel magnate's estate.***

Special thanks to Kirk Morgan (J.D. Candidate, Texas Tech University School of Law) and Joel Dobris (Professor of Law, UC Davis School of Law) for bringing these articles to my attention.

Judge rules Golda Bechal was of sound mind when she left her fortune to Chinese restaurant owners

Earlier on this blog, I discussed the will contest initiated by Mayfair millionaire, Golda Bechal’s nieces who were trying to prove that their aunt lacked testamentary capacity when she left her £10 million fortune to Chinese restaurant owners Kim Sing and Bee Lian Man.

Here is the resolution of this contest from Elderly Briton leaves fortune to Chinese restaurant owner, news.yahoo.com, Dec 7, 2007:

The family of a wealthy British pensioner who left her entire fortune to the owners of a Chinese restaurant failed Friday in a legal bid to have her will declared invalid.***

[A] judge at London's High Court ruled that the testament, made in 1994, remained valid when Bechal died in 2004, aged 88, leaving a portfolio of commercial properties to her long-standing "best friends".***

"In my judgment, on the balance of probabilities, Mrs Bechal had testamentary capacity[,]***" said judge Donald Rattee.***

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) and Rebekah Booth, Melanie Casner and Rickie Cayton (J.D. Candidates, Texas Tech University School of Law), for bringing this article to my attention.