Wills, Trusts & Estates Prof Blog

Trustees Report Medicare’s “Serious Financial Status”

The following is from a press release issued by the U.S. Department of Health & Human Services on March 25, 2008, entitled Medicare Trustees Report Shows Serious Financial Status of Medicare Program:

In their annual report, the Medicare Trustees today announced that both the Medicare Hospital Trust Fund and the Supplementary Medical Insurance Trust Fund expenditures are growing faster than the rest of the economy. The Trustees report expenditures were $432 billion in 2007, or 3.2 percent of gross domestic product (GDP), and are projected to increase to nearly 11 percent of GDP in 75 years.

The Trustees report that Medicare’s Hospital Insurance (HI) Trust Fund will become insolvent earlier in 2019 than reported last year. HI expenditure growth is estimated to average 7.4 percent each year over the next 10 years, a higher rate than either Gross Domestic Product (GDP) or Consumer Price Index (CPI) growth. This year the HI Trust Fund will spend more than its income, and from 2009 through 2017, about $342 billion will need to be transferred from the Federal treasury to cover beneficiaries’ hospital insurance costs.***

Special thanks to Neil E. Hendershot, Esq. (Attorney at law, Goldberg Katzman, P.C., Adjunct Professor, Widener University School of Law) for bringing this article to my attention. You can read more on Neil's blog at PA Elder, Estate & Fiduciary Law Blog.

Estate Planning and Probate CLE

The State Bar of Texas is sponsoring the following seminars for the 32nd Annual Estate Planning and Probate Course:

• Live Presentation in Dallas, Texas on June 11-13
• Video Replay in San Antonio, Texas on August 6-8
• Video Replay in Houston, Texas on September 17-19

Course highlights include:

• Expert Panels Discuss Public Benefits and Finance Issues
• Seven Strategies to Stay at Home Longer
• Attorney Ad Litem Certification
• Examining the Medical Expert Witness in a Guardianship Case
• ABA Enhancing Capacity Guidelines

Come a day early to attend the Nuts and Bolts of Estate Planning and Probate.

This course is specifically designed for new attorneys and attorneys new to the practice. Topics include the client interview and engagement, estate planning process, probate process, and guardianships.

Joint Committee on Taxation Report on Possible Areas of Tax Reform

The staff of the Joint Committee on Taxation has prepared a document entitled Taxation of Wealth Transfers Within a Family: A Discussion of Selected Areas for Possible Reform. This report was scheduled for a public hearing before the Senate Committee on Finance on April 3, 2008.

Here is an excerpt from this document:

This document is divided into two parts. The first part describes a prominent feature of the current Federal estate and gift tax system, the partially unified credit against estate and gift tax, and evaluates two possible reforms to that credit. The credit against estate and gift tax is partially unified under present law because a single tax rate schedule applies to gifts made during life and transfers at death but the effective exemption amount under the gift tax ($1 million) is different from the effective exemption amount under the estate tax ($2 million in 2008).***

The second part of this document sets forth a discussion of liquidity to pay estate tax when estates consist largely of farms or other businesses. Congress at various times has passed reforms intended to mitigate the effect of the estate tax on family farms and other family-owned businesses. A particular concern has been that if the value of an estate is largely attributable to a farm or other business, heirs of the estate may be forced to sell the business to pay the estate tax. Forced sales of family businesses are seen as undesirable in part because of possible job losses and other disruptions to communities.

Special thanks to Patrick S. Sylvester (Attorney & Counselor at Law, Sylvester Law Firm, PC) for bringing this document to my attention.

Heirs Sell Celebrated Artwork to Cover Estate Taxes

The following is from Carol Vogel, A Colossal Private Sale by the Heirs of a Dealer, NYTimes.com, April 4, 2008:

In what experts described as the largest private sale of art ever, the heirs of the legendary dealer Ileana Sonnabend have parted with some $600 million worth of paintings and sculptures in two transactions to cover their estate taxes.***

Ms. Sonnabend’s art trove, which includes seminal works by artists like Andy Warhol, Jasper Johns, Robert Rauschenberg and Cy Twombly, is valued at more than $1 billion. Taxes on the estate amount to more than half the value of the assets, experts said.***

Known for a shrewd eye and sure taste, Ms. Sonnabend was among the world’s most powerful dealers in the 1960s and ’70s, as was her first husband, Leo Castelli.***

In addition to selling art Ms. Sonnabend enjoyed holding on to her favorites, and over the years she amassed hundreds of works of art and outstanding examples of 20th-century furniture. Much of it travels on loan to museums around the world, but a good deal has also been in storage for decades.***

Top SSRN Downloads

Here are the top downloads from February 4, 2008 to April 4, 2008 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	279	Deduction Ad Absurdum: CEOs Donating Their Own Stock to Their Own Family Foundations David Yermack, New York University - Stern School of Business, Date posted to database: February 24, 2008 Last Revised: March 29, 2008
2	207	Back to School: The New Parameters of Funding a Grandchild's College Education Richard L. Kaplan, University of Illinois College of Law, Date posted to database: February 13, 2008 Last Revised: February 23, 2008
3	134	Empty Promises: Settlor's Intent, the Uniform Trust Code, and the Future of Trust Investment Law Jeffrey A. Cooper, Quinnipiac University School of Law, Date posted to database: February 6, 2008 Last Revised: March 17, 2008
4	100	The Strict Rules of Charitable Split Interest Gifts Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: January 29, 2008 Last Revised: January 29, 2008
5	69	Spiritualism and Will(s) in the Age of Contract Christopher J. Buccafusco, University of Chicago - Law School, Date posted to database: February 25, 2008 Last Revised: February 25, 2008
6	65	Bigelow: The Ninth Circuit on FLPs Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: December 17, 2007 Last Revised: December 17, 2007
7	47	Charitable Trusts: A Comparative Study of India, United Kingdom and the United States Tarun Jain, London School of Economics & Political Science (LSE) - London School of Economics, Date posted to database: January 26, 2008 Last Revised: January 26, 2008
8	44	How Do I Love Thee, Let Me Count the Days: Deathbed Marriages in America Terry L. Turnipseed, Syracuse University College of Law, Date posted to database: January 29, 2008 Last Revised: January 29, 2008
9	40	Serve the Cheerleader - Serve the World: Representation in Estate and Trust Proceedings and under the Uniform Trust Code and other Modern Trust Codes Martin D. Begleiter, Drake University Law School, Date posted to database: January 9, 2008 Last Revised: January 9, 2008
10	30	More is Not Always Better than Less: An Exploration in Property Law Daphna Lewinsohn-Zamir, Hebrew University - Faculty of Law, Date posted to database: March 4, 2008 Last Revised: March 12, 2008

Proposed Treasury and IRS Rule Making May Have Significant Tax Consequences

James V. Roberts (Attorney at Law, Glast, Phillips & Murray P.C.) has recently published his article entitled New and Revamped 529 Plan Regulations Soon to Be Proposed, RPPT eREPORT (2008).

Here is the opening paragraph to his article:

On January 17, 2008, Treasury and the Internal Revenue Service issued an Announcement of Proposed Rule Making (“ANPRM”) regarding Section 529 college tuition plans. This ANPRM should be of interest to every estate planner and return preparer because it seeks to: (I) propose an anti-abuse rule (with changes to the preparer penalty provisions, all such rules now assume larger importance); (II) determine the estate, gift and GST tax results of contributions, transfers and withdrawals; and (III) create rules for making the 5 year election, addressing some income tax issues, and creating new record keeping requirements.

Attending a funeral online is now a reality

According to Pay-per-view funeral Webcasts go live, msnbc.msn.com, April. 1, 2008:

Pay-per-view funerals go live online in Britain on Tuesday, allowing mourners who cannot attend services in person to pay their last respects via the Internet.

Despite criticism of the scheme as macabre, the company who launched the service, Wesley Music, is planning to offer it to crematoria across the country who will charge a one-off payment of around $150 for access to a funeral Webcast.***

"Families are dispersed across the world these days and sometimes it's the case that someone cannot get home in time for a funeral," said Alan Jeffrey, director of Wesley Music.***

"It's a personal thing. It doesn't go out for all and sundry to gawk at,"*** "There is a password for the family to send to people who want to watch online."***

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

Ethical Issues in Trusts and Estates CLE

The American Bar Association Section of Real Property, Trust and Estate Law, Section of Family Law, Young Lawyers Division and the ABA Center for Continuing Legal Education are sponsoring a teleconference and live audio webcast on April 16, 2008 entitled Ethical Issues in Trusts and Estates - Part Eight of the Essential Issues in Trust and Estate Law Teleconference Series.

Here is a description of this program:

The Essential Issues in Trust and Estate Law Series provides attorneys with the opportunity to learn more about the key basics of trust and estate law. Whether you are a new attorney wanting to know more about trust and estate law, or a seasoned attorney looking for a refresher, this series has the information you need. Click here for more information on the series and series registration options.

The representation of individual clients can always present a variety of ethical issues. The difficulties are often more complex in the trusts and estates field where the concepts of fiduciaries and beneficiaries are introduced. This teleconference and live audio webcast will review a variety of ethical rules that govern the representation of clients from both the attorney and the firm perspective. The faculty will note where there are additional complications created in a trusts and estates relationship and attempt to provide some suggestions and guidance on how an attorney can proceed in an ethical manner in addressing these issues.

EU Court Holds Surviving Life Partner Should Receive Pension Benefits

The following is from Court rules on gay marriage rights, news.yahoo.com, April 1, 2008:

EU nations that recognize same-sex unions as legal marriages must grant surviving partners the same pension rights as given to those in traditional marriages, the EU Court of Justice ruled Tuesday.***

The EU court said pension plan had discriminated against the man on the grounds of sexual orientation because the men's relationship had been recognized under German law as a legally registered life partnership equivalent to a traditional marriage.

The court did not say, however, that all 27 EU nations must recognize same-sex unions, only that if they did they must grant life partners the same benefits.***

Killer should not do indirectly what he or she cannot do directly

Karen J. Sneddon (Assistant Professor, Mercer University Walter F. George School of Law) has recently published her article entitled Should Cain's Children Inherit Abel's Property?: Wading into the Extended Slayer Rule Quagmire, 76 UMKC L. Rev. 101 (2007).

Here is the introduction to her article:

A killer should not benefit from the death of his or her victim. Confusion exists as to whether this notion precludes not only direct benefits, like inheriting the victim's property, but also precludes indirect benefits. Indirect benefits include instances where the individual who inherits the victim's property subsequently gives the victim's property to the killer. The individual may give the killer the property to pay for the killer's legal expenses or to support the killer upon completion of the killer's prison sentence. Generally, the law prohibits an individual from doing indirectly what he or she cannot do directly. And even though “[t]he law generally will not permit by indirection or circuity what it will not allow directly,” attempts by courts, including the U.S. Court of Appeals for the Seventh Circuit, to address the problem of indirect benefits to the killers have been trapped in a quagmire of conflicting goals and fact-specific decisions. Such decisions provide little guidance or direction to future decision makers. This Article argues that a killer should not be able to indirectly benefit from the death of his or her victim. More specifically, this Article examines case law grappling with the ability of the killer's relatives to receive the victim's property. This Article then examines the challenges, feasibility, and necessity of crafting a rule that prevents killers from indirectly benefiting from the death of their victims. Finally, this Article proposes a clearly articulated rule that furthers both the relevant policies and acknowledges the significance of certain facts.

Expanding Usable Organ Criteria Has Led to Decreased Mortality

According to Jean P. Fisher, Hospitals less finicky about kidneys, newsobserver.com, March 2, 2008:

Deaths among patients awaiting lifesaving kidney transplants fell nationally last year amid rising organ donation and broader use of kidneys that would once have been discarded.***

So-called expanded-criteria donor organs are more likely to fail than kidneys from younger, healthier donors. Traditionally, such organs were considered unsuitable for transplant. But as the gap continues to widen between the number of patients seeking transplants and the number of organs available to them, Stratta and other transplant experts increasingly see them as an untapped resource.***

The supply of kidneys available for transplant has increased nearly 15 percent since the U.S. Department of Health and Human Services established the national collaborative. And experts see signs that increasing the supply of organs is helping save lives.

Many states have also passed laws that allow hospitals to treat the organ donation symbol on a person’s driver’s license as legal consent to donate. North Carolina enacted such a law in October. Before it took effect, families did not always honor loved ones’ wishes to donate organs[.]***

Special thanks to Dave Undis (Founder of LifeSharers) for bringing this article to my attention.

What Does “Rich” Mean Today?

According to Tom Sullivan, Are You Rich?, finance.yahoo.com, March 18, 2008:

Yes, it takes more than $10 million to be seen as rich these days. It takes more like $25 million. Not only is that the minimum for the red-carpet treatment at a growing number of banks, it is also, in the view of many experts, the sum needed for a truly cushy retirement, one free of financial worry.***

More and more rich people certainly believe they need at least $25 million. In a recent survey by Chicago-based Spectrem Group, 25% of affluent folks said it takes $25 million to be rich, and another 8% said $100 million. Those two groups combined weren't all that much smaller than the 45% who cited $5 million.***

True, only a tiny portion of all Americans meet our definition of rich: Just 0.20% of households have net worths of $25 million or more. But in absolute numbers, the group is considerable.***

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

Uncle says Heath Ledger may have more than one child

The following is from Even in Death, Rumors Plague Ledger, news.aol.com, March 31, 2008:

In the old days, the death of a celebrity meant the death of gossip-mongering around them. It was a level of respect afforded to the fallen star, their family and fans as a whole. But that was before Princess Diana, before the tabloid explosion and before the Internet.

Now, it appears, nobody -- dead or alive -- is too taboo for a headline, as Heath Ledger's uncle claims the actor may have fathered a child when he was 17.***

The "love child" report quotes Ledger's uncle, who claims that "there is a very real possibility that Heath" fathered a child when he was 17 and dating a 25 year old. The report contends that if it's proven to be Ledger's child, it could cause an estate battle for his ex-fiance Michelle Williams, with whom Ledger had their daughter Matilda.***

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

2009 AALS Annual Meeting Call for Papers and Participation

The AALS Section on Donative Transfers has announced a call for papers and participation for the 2009 Annual Meeting.  The program is entitled New Voices in Trusts & Estates.

Here are the details as provided by Section leadership:

Trusts and Estates has long been a central part of the law school curriculum. But it is not a static field. On the contrary, as the law and the social policies that underpin the law continue to evolve, so does our teaching and scholarship. Each generation of teachers and scholars must address the effect of the passage of time on the relevance of the prior generation’s learning and at the same time must develop cogent understandings of the new and often vexing problems that have arisen for the first time. 

At the AALS Annual Meeting in San Diego in January 2009, our Section program will highlight “New Voices in Trusts and Estates.”  We invite Section members to submit an abstract or précis of up to 10 pages that summarizes a current scholarly project for presentation at the Section’s Annual Meeting.  All T&E-related projects are welcome, including those about teaching and curricular issues. We especially welcome submissions from those who will have been full-time law teachers for fewer than seven (7) years as of January 1, 2009, and those who have not presented in recent years at a prior Section program or other national T&E-related conference. Papers accepted for publication are eligible for consideration if the paper will not be published prior to the Annual Meeting.  There is no publication commitment or requirement associated with participation on the panel.

Our Section membership is diverse; we encourage new voices, interests and perspectives. Please submit your abstract or précis by August 1, 2008, to Rob Sitkoff at rsitkoff@law.harvard.edu. Participants will be notified in late September.

Deficit Reduction Act of 2005 and Healthcare Planning for the Elderly

Alison Barnes (Professor of Law, Marquette University Law School) has recently published her article entitled Long Term Care in the Political Balance, 9 Marq. Elder's Advisor 1 (2007).

Here is an excerpt from her article:

The Deficit Reduction Act of 2005 continued the long history of squeezing off Medicaid eligibility for aged people with disabilities who are not destitute.*** The Medicaid eligibility rules seek to utilize savings to pay for nursing facility care and recover expenditures from the value of assets generally exempt during the Medicaid recipient's lifetime, primarily the home.***

As one student*** inquired***: Do you mean that if I set aside assets to cover five years of nursing facility care (at $5,000 per month on average nationwide, or $300,000) then the government will pay for my nursing home care? That generally is correct[.]***

For the great majority, however, that set-aside is impossible. The question becomes: How much savings is “too much” to reserve from payment for nursing home care, and does society wish to scrutinize why the elderly owner seeks to set it aside from his or her support? ***

Keeping your will terms to yourself – A prudent decision

According to Martha Neil, Attorney’s Advice About Estate Plans: Don’t Tell the Family, abajournal.com, March 27, 2008:

Tempted to tell an ungrateful relative that he or she has been cut out of your will? Don't do it, an attorney advises.

The unnamed legal counsel, writing in response to an earlier column on open estate planning, says it's generally a bad idea to tell relatives too much about what they can expect to inherit under a will, reports the Prairie Star.***

Special thanks to Paul L. Caron (Associate Dean of Faculty, Charles Hartsock Professor of Law, University of Cincinnati College of Law) for bringing this article to my attention.

Having too many investment accounts may not be wise estate planning

The following is from Mickey Meece, As Accounts Pile Up, Less Becomes More, NYTimes.com, March 18, 2008:

The unwieldy task of looking after many financial accounts, the cost of paying for their upkeep and the risk of losing track of money in the process can lead to diminishing returns. In fact, investors who cannot tally their accounts on two hands might want to consolidate, financial advisers say.***

It can be especially overwhelming for people who have inherited a lot of money or sold all or part of a business, said Hannah Shaw Grove, a private wealth specialist.***

This year, investors are expected to move more than $300 billion out of 401(k)’s into I.R.A.’s, according to Cerulli Associates, a research firm specializing in the financial services industry. As people become more serious about managing all their accounts, said Carolyn M. Clancy, executive vice president for personal investment at Fidelity, they want to know that their beneficiaries will be taken care of and that they will have lower fees, lower or no loads on mutual funds and access to investment guidance — all in one place.***

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

Offshore Trusts CLE

The National Constitution Center is sponsoring a live audio conference on April 22, 2008 entitled Offshore Trusts: Tax Essentials for International Estate Planning.

Here is a summary of the program:

Increased interest in foreign trusts has dramatically risen over the past few years. Applying the proper tax and transparency requirements is vital in structuring international estate planning. What are the current international and domestic estate planning essentials that you need to be aware of? Join us for this 60-minute audio program where you will discover:

• Tax Disclosure and Transparency: What You Need to Know Now
• Strategies to Secure Foreign vs. U.S. Assets of International Trusts
• Residency Rules & Expatriation: How Will this Affect Your Client?
• Foreign Grantor Trusts: Taxable & Nontaxable Assets

Top SSRN Downloads

Here are the top downloads from January 30, 2008 to March 30, 2008 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days

Rank	Downloads	Paper Title
1	268	Deduction Ad Absurdum: CEOs Donating Their Own Stock to Their Own Family Foundations David Yermack, New York University - Stern School of Business, Date posted to database: February 24, 2008 Last Revised: March 29, 2008
2	186	Back to School: The New Parameters of Funding a Grandchild's College Education Richard L. Kaplan, University of Illinois College of Law, Date posted to database: February 13, 2008 Last Revised: February 23, 2008
3	132	Empty Promises: Settlor's Intent, the Uniform Trust Code, and the Future of Trust Investment Law Jeffrey A. Cooper, Quinnipiac University School of Law, Date posted to database: February 6, 2008 Last Revised: March 17, 2008
4	98	The Strict Rules of Charitable Split Interest Gifts Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: January 29, 2008 Last Revised: January 29, 2008
5	81	In Their Own Hand: An Analysis of Holographic Wills and Homemade Willmaking Stephen Clowney, U.S. Court of Appeals for the Third Circuit, Date posted to database: January 15, 2008 Last Revised: February 6, 2008
6	70	The Human and Economic Dimensions of Altruism: The Case of Organ Transplantation Richard A. Epstein, University of Chicago - Law School, Date posted to database: February 3, 2008 Last Revised: February 14, 2008
7	68	Spiritualism and Will(s) in the Age of Contract Christopher J. Buccafusco, University of Chicago - Law School, Date posted to database: February 25, 2008 Last Revised: February 25, 2008
8	64	Bigelow: The Ninth Circuit on FLPs Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: December 17, 2007 Last Revised: December 17, 2007
9	44	Charitable Trusts: A Comparative Study of India, United Kingdom and the United States Tarun Jain, London School of Economics & Political Science (LSE) - London School of Economics, Date posted to database: January 26, 2008 Last Revised: January 26, 2008
10	42	How Do I Love Thee, Let Me Count the Days: Deathbed Marriages in America Terry L. Turnipseed, Syracuse University College of Law, Date posted to database: January 29, 2008 Last Revised: January 29, 2008