Wills, Trusts & Estates Prof Blog

Evil People Target the Greatest Generation

The "Greatest Generation," that is, individuals who reached adulthood between the start of the Great Depression (1929) through the end of World War II (1945), are now considered as "the greatest generation to exploit."

The following excerpts are from Lou Ann Anderson, Where Looters, Poachers Stalk Prey, The Conservative Voice, July 13, 2008:

The assets of older Americans are being looted via actions in which probate instruments such as powers of attorney, wills, trusts or guardianships are used to gain control of property. These actions evolve into an Involuntary Redistribution of Assets (IRA) as ultimate financial resource distribution becomes contrary to the asset owner's intentions. * * *

Because the pool of those willing to exploit the elderly is endless, it is important to be aware of places and venues where today's predators search for potential victims. The list might be surprising, but remember: the guise of community respectability, professional credibility, even enhanced morality or religiosity can be important entry points into the life of a predator's next mark. With that, here is our list of where the looters and the poachers stalk prey:

• Senior centers
• Government-sponsored lectures (especially through departments/agencies specializing in eldercare, aging)
• Civic groups (Kiwanis, Rotary, etc.)
• Churches, synagogues
• Retirement communities, homeowners' associations
• Support groups (church-sponsored and otherwise)
• Medical facilities, nursing homes, assisted living facilities
• Estate planning seminars, sales presentations (beware 'free food' ploys)
• Consultations with 'professionals' (lawyers, caregivers, accountants, social workers, etc.)
• Any places that cater to an older clientele (gyms, dance clubs, libraries, restaurants, etc.) * * *

IRA predators are a fact of today's life. Due to the wealth transfer getting ready to occur in the next 20 or so years, Involuntary Redistribution of Assets actions will likely skyrocket. People think proper estate planning will protect them -- wrong! People think they don't have enough assets to be a target -- wrong!! There is no inoculation from the threat of IRA. There is no avoidance of being a potential target. This information is not offered as a broad-based indictment of all organizations and entities, but awareness should exist on the part of those hosting and attending community events. Knowledge of today's predatory landscape and recognition of the places haunted by asset looters and property poachers will provide an upper hand. And as forewarned is forearmed - stay alert!

It is likely the Ms. Anderson's indictment of organizations and individuals who generally have their members/clients best interests in mind is overstated.  Nonetheless, it is important for everyone to make certain they are getting sound advice from organizations and individuals who are really "on their side."

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

The Sensible Tax Act of 2008

On July 15, 2008, Rep. James McDermott [D-WA] introduced into the House The Sensible Tax Act of 2008.

Here are some of the highlights of this bill:

• The estate tax applicable exclusion amount would be set at $2,000,000 and subsequently adjusted for inflation.
• Marginal tax rates would increase to 55% for estates over $10,000,000.
• Repeal of state estate tax deduction.
• Reinstatement of state estate tax credit.
• Reinstatement of a "unified" tax for inter vivos gifts and at-death gifts (that is, the applicable exclusion amount for inter vivos gifts would be $2,000,000 with inflation adjustments).
• The applicable exclusion amount would be increased by any unused applicable exclusion of a predeceased spouse.

Special thanks to Adam Hirsch (William and Catherine VanDercreek Professor of Law, Florida State University) for bringing this bill to my attention.

Do you want to be an English Solicitor?

According to Houston Putnam Lowry (Chartered Arbitrator, Brown & Welsh, P.C., Meriden, CT):

Changes were announced on July 1, 2008, to take effect September 1, 2008 on the requirements to become a solicitor in England.  The present rules do not require a candidate to have actual experience in English law.  The new rules will require a candidate to have a year's experience in English law.  Further details can be found at http://www.sra.org.uk/solicitors/qltt/revised-guidance.page.

If you have considered applying to become an English solicitor, now might be the time to do so if you want to take advantage of the old regulations.

The story of Betty Neumar, aka, "The Black Widow," continues

Earlier on this blog (here and here), I reported about Betty Neumar who may have been killing off her husbands for fifty years.  Five times since the 1950s, she has been married and each marriage has ended with the death of the husband.  Recently, she was charged with hiring a professional to kill one of her husbands (Gentry) back in 1986.

Here are some recent developments:

• Betty told her grandson, Jeff Carstensen, that she was going to purchase a $100,000 life insurance policy on his life and name herself as the beneficiary.
• Police are reexamining the deaths of one of Betty's children as well as four of her prior husbands.
• A North Carolina judge refused to lower her bail which had been previously set at $500,000.

See AP, Judge refuses to lower bond for 'black widow', CNN.com, July 14, 2008.

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

Massachusetts wants to share in same-sex marriage business

Earlier on this blog, I discussed how 12,000 New York same-sex couples are anticipated to head to California to marry because California does not limit such marriages to California citizens.

Although the first state to legalize same-sex marriage, Massachusetts has not been able to share in the economic benefits of being a marriage destination because a law passed in 1913 prevents marriages which would not be legal in the partners' home states.

On July 15, 2008, the Massachusetts Senate voted to repeal this law.  It is expected that the House will pass the bill next week and Governor Deval Patrick whose daughter is a lesbian has indicated that he would sign the repeal.

The following is from Pam Belluck & Katie Zezima, A 1913 Law Dies to Better Serve Gay Marriages, NY Times, July 16, 2008:

State officials said they expected a multimillion-dollar benefit in weddings and tourism, especially from people who live in New York. A just-released study commissioned by the State of Massachusetts concludes that in the next three years about 32,200 couples would travel here to get married, creating 330 permanent jobs and adding $111 million to the economy, not including spending by wedding guests and tourist activities the weddings might generate.

Proposition 8 -- Will same-sex marriage be banned in California?

Earlier on this blog, I discussed the case of In re Marriage Cases decided May 15, 2008 in which the California Supreme Court held in a 4-3 opinion that two state laws that had limited marriages to opposite-sex partners are unconstitutional and held that single-sex couples have a constitutional right to marry. The court explained that it could not "find that retention of the traditional definition of marriage constitutes a compelling state interest."

The citizens of California will have the opportunity to overturn this decision in November by passing Proposition 8 which would amend California's constitution to limit marriage to individuals of opposite gender.

Equity California had challenged the inclusion of Proposition 8 on the ballot arguing that the signature petitions were misleading.  However, on July 16, 2008, the California Supreme Court has refused to hear the challenge and thus Proposition 8 will remain on the ballot.

See Lisa Leff,  Calif. court rejects gay-marriage-initiative case, AP, June 17, 2008.

How to Effectively and Efficiently Interact with Grieving Clients

Gary Glober, M.D. (Leadership and Communication Skills Consultant, Houston, TX) has written an article entitled How to Effectively and Efficiently Interact with Grieving Clients, Prob. & Prop., July/Aug. 2008, at 61.

This article overviews the possible symptoms and problems that a client might be dealing with after a loss. Then, it provides advice on how to deal with these issues effectively and efficiently. It provides both different techniques and suggested methods of handling problems through various scenarios and examples.

Use of Captive Insurance Companies in Estate Planning

Gordon A. Schaller and Scott A. Harshman have written an article entitled Use of Captive Insurance Companies in Estate Planning, 33 ACTEC Journal 252 (2008).

Here is an introduction to the article.

Rising insurance costs coupled with increasing self-insured risk is a major issue that many businesses face. In order to mitigate these risks, an increasing number of businesses are implementing captive insurance programs. A captive insurance company is a subsidiary or affiliate of business entities formed to insure or reinsure the risks of those entities. Reasonable insurance premiums paid to properly structured captives are deductible by the affiliated companies. Insurance companies are provided with special tax incentives. Properly structured, the premiums may be non taxable to the captive or offset by a deduction for reserves. Reserves and free surplus may be invested by the captive and retained in anticipation of future losses or to fund shareholder distributions. Today, the owners of thousands of businesses have begun to accumulate substantial pretax wealth through their captive insurance companies. The purpose of this article is to describe the history and requirements of captive insurance companies, focusing on the estate and business planning opportunities available to the owners of private companies.

The "2% Floor" Grows Up

Ronald D. Aucutt (McLean, Virginia and Washington D.C.) has written an article entitled The “2% Floor” Grows Up – A Biography of Legislation, Litigation, and Regulations, 33 ACTEC Journal 214 (2008).

Here is an introduction to the article.

On January 16, 2008, the United States Supreme Court decided Michael J. Knight, Trustee v. Commissioner. In a unanimous opinion by Chief JusticeRoberts, the Court affirmed the Second Circuit and held that for federal income tax purposes trust investment advisory fees are subject to the 2% floor of IRC §67(a). Thus, after 21 years of maturation, the special rule for trusts and estates in IRC § 67(e) has burst into full adulthood, emancipated from the litigation in which rival forces had tried so hard to shape it. The question now is what kind of adult life this rule will have. Will it will stand up, find its own identity, and contribute responsibly to the community of tax policy? Or will it continue to show the scars of its hasty delivery in a House-Senate conference and a troubled upbringing in foster care, passed from court to court to court? The answer will have far reaching significance for all fiduciaries and their advisers.

A Hitchhiker's Guide to International Estate Planning

Samuel Donaldson (Associate Professor of Law, Director of Graduate Program in Taxation, University of Washington School of Law) haw written an article entitled A Hitchhiker's Guide to International Estate Planning: Estate Planning for United States Citizens with Assets Abroad and for Nonresidents with United States Assets, 33 ACTEC Journal 228 (2008).

Here is an introduction to the article:

This article offers an overview of the common estate planning issues faced by practitioners when their clients are U.S. citizens with business and investment activities outside the U.S. or nonresidents with U.S. business or investment activities.

Prevention and Resolution of Trust and Estate Controversies

Mark S. Poker and Amy S. Kiiskila have written an article entitled Prevention and Resolution of Trust and Estate Controversies, 33 ACTEC Journal 262 (2008).

Here is the introduction to the article.

Trust and estate litigation can take a financial and emotional toll on both beneficiaries and fiduciaries. Attorneys can help to minimize disputes through careful and creative drafting of estate planning documents and providing conscientious advice to fiduciaries and beneficiaries as to their rights and responsibilities. This article will address methods of drafting and administering trusts and estates and resolving disputed issues in a manner that reduces the impact of trust and estate controversies.

Congress Takes the Stuffing out of Charitable Donations

Matthew S. Wilcox has written an article entitled Congress Takes the Stuffing our of Taxidermy Charitable Donations, Heritage Trusts & Estates Newsletter, Jul./Aug., 2008, at 4.

The article discusses the effect of the Pension Protection Act of 2006 on taxidermy charitable donations. The Act mandates that the current basis of the donation is the lesser of the fair market value or the immediate cost or preparing, stuffing, and mounting.

Who has the Capacity to Vote

Charles P. Sabatino and Sally Hurme have written an article entitled Who has Capacity to Vote?, 5 Nat'l College of Probate Judges 8 (2008).

The article discusses the right of persons with cognitive disabilities to vote. It gives an overview of the basic problems with current states' laws that prevent these people from voting. It also points out some practical barriers older people in a face in trying to vote. E.g. not being able to drive to the polls or no one getting them an absentee ballot. The article then gives some insight on these problems should be addressed and remedied.

Current Perpetuities Law in the State

Lynn Foster has written an article entitled Fifty-one Flowers: Post-Perpetuities War Law and Arkansas's Adoption of USRAP, 29 U. Ark. Little Rock L. Rev. 411 (2007).

Here is a summary of the article.

After decades of "perpetuities wars," the unmodified Uniform Statutory Rule Against Perpetuities (USRAP) is currently the law in roughly one-third of the states. ... Example 4: S devised property in trust, directing the trustee to pay income to his children for life, then to divide the corpus among his grandchildren. ... A exercised her power of appointment in her will, directing that trust income be paid to her children for their lives, and at their deaths, that corpus be paid to A's grandchildren. ... In dictum, the Arkansas Supreme Court has stated that an option to repurchase, when an owner has conveyed to a buyer but reserves a right to initiate a purchase at a later date, may be subject to the Rule. ... First, a court will reform a disposition if a property interest or power of appointment subject to USRAP becomes invalid. ... For non-USRAP states, it briefly describes any dynasty or perpetual trust legislation. ... Article II, section 29 of Arizona's Constitution declares that "no hereditary emoluments, privileges, or powers shall be granted or conferred, and no law shall be enacted permitting any perpetuity or entailment in this State."

Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?

Max Schanzenbach (Benjamin Mazur Professor of Law, Northwestern School of Law) and Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) wrote a new article entitled Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?, 50 J. Law & Econ. 681 (2007).

Here is the abstract of the article.

This paper investigates the effect of changes in state prudent trust investment laws on asset allocation in noncommercial trusts. The old prudent-man rule favored "safe" investments and disfavored "speculation" in stock. The new prudent-investor rule directs trustees to craft an investment portfolio that fits the risk tolerance of the beneficiaries and the purpose of the trust. Using state- and institution-level panel data from 1986-97, we find that after adoption of the new prudent-investor rule, institutional trustees held about 1.5-4.5 percentage points more stock at the expense of "safe" investments. Our findings explain roughly 10-30 percent of the overall increase in stock holdings in the period studied. The rest of the increase appears to be attributable to stock market appreciation. We conclude that, even though trust fiduciary laws are nominally default rules, institutional trustees are nonetheless sensitive to changes in those rules.

Choices for Care

Tracy L. Bach (Professor of Law and Associate Director of the Climate Legacy Initiative, Vermont School of Law) has written an article entitled Choices for Care: Consumer Choice and State Policymaking Courage amid Medicaid's Shifting Entitlement to Long-term Care, 9 Marq. Elder's Advisor 269 (2008).

This article discusses new, alternative methods to current long term treatment options, specifically discussing Vermont's new system of encouraging medicaid eligible patients to seek care at home as opposed to a nursing home.

Involuntary Passive Euthanasia in U.S. Courts

Thaddeus Pope (Associate Professor of Law, Widener University School of Law) has written an article entitled Involuntary Passive Euthanasia in U.S. Courts: Reassessing the Judicial Treatment of Medical Futility Cases, 9 Marq. Elder's Advisor 229-268 (2008).

Here is the abstract of the article.

Over the past twenty-five years, a significant number of surrogate decision makers have demanded that a health care provider use medical technology to prolong a patient's life beyond the point thought medically appropriate. These surrogates want to continue life-sustaining medical treatment (LSMT) that providers want to stop. While most of these futility disputes are resolved informally inside the hospital, dozens have now been litigated in U.S. courts. Because the judicial treatment of these disputes casts a long, dark shadow on the informal resolution of all the others, it is important to ascertain exactly what guidance these court cases provide.

In assessing the judicial treatment of futility cases, most of the medical, legal, and bioethical literature concludes that courts have generally disfavored providers. But these assessments are based on limited and outdated sets of cases. In this article I offer a comprehensive review of futility cases from 1983 to 2007. Based on this review, I argue that courts have generally neither prohibited nor punished the unilateral refusal of LSMT. Providers have regularly obtained both ex ante permission and ex post forgiveness for stopping LSMT without consent.

Leaving More than Money

Lela Love (Professor of Law, Director, Kukin Program for Conflict Resolution and the Cardozo Mediation Clinic, Cardozo School of Law) and Stewart Sterk (H. Bert and Ruth Mack Professor of Real Estate Law, Cardozo School of Law) have written an article entitled Leaving More than Money: Mediation Clauses in Estate Planning Documents, 65 Wash & Lee L. Rev. 539 (2008).

Here is the abstract of the article.

When probate disputes arise, an increasing number of courts have been referring those disputes to mediation. Estate planners, however, have been less proactive about drafting wills to include mediation clauses that would anticipate estate disputes and channel them away from litigation. When a will mandates mediation, the will provides a dispute resolution mechanism designed to preserve family harmony, conserve estate assets, and avoid airing the family's “dirty laundry” – objectives common to many testators.

Mediation clauses in wills are no panacea. They are of little value to testators who exalt control over estate assets above all other concerns, and they are unlikely to bind disappointed family members whose primary claim is “against the will” rather than “under the will.” Nevertheless, compared to other alternatives frequently employed by estates lawyers (including “no contest” clauses), mediation clauses present significant potential for reducing estates litigation, with its attendant financial and emotional costs.

Should Probate Procedure be Revisited?

Kent D. Schenkel has written a new article entitled Testamentary Fragmentation and the Diminishing Role of the Will: an Argument for Revival, 41 Creighton L. Rev. 155 (2008).

Here is the abstract of the article.

Popularized by a desire to avoid the complexities and inefficiencies of probate, the now ubiquitous nonprobate system of transferring property at death brings a wealth of complexities and inefficiencies of its own. Our patchwork system of will substitutes, while undeniably simplifying post-death administration, requires more documentation, techniques, and tasks than ever before. On the positive side, our experiences with nonprobate transfer techniques revealed flaws in testamentary transfer laws that are now being addressed. But exposure of ancillary problems with wills laws is only a byproduct of the nonprobate revolution. If we are to reign in fragmentation and its consequent ponderousness and inefficiency we must admit that our aversion to probate, not wills, is driving the proliferation of wills substitutes. Ironically, the will, the instrument whose undesirable post-death characteristics spawned the turn towards alternative techniques, offers a simple and efficient mechanism for channeling a person's testamentary desires. The only significant impediment to reviving the will as the instrument of choice for this purpose is that wills carry the burden of probate. But because probate is now seen as largely unnecessary in many estates, legislation should focus on relieving wills from that burden.

A "simple" probate should not be this complicated

University of Wisconsin law student Mark T. Johnson has written an article entitled A "Simple" Probate Should Not be This Complicated: Principles and Proposals for Revising Wisconsin's Statutes for Probate Summary Procedures, 2008 Wis. L. Rev. 575 (2008).

Here is a summary of the article.

Piecemeal changes to the Wisconsin probate summary procedures have unintentionally shifted the burdens and risks associated with settling small estates. For example, summary settlement and summary assignment, which were intended to be simple and straightforward, have fallen into disuse because they are cumbersome and confusing. On the other hand, transfers by affidavit are easy to use, but misuse is a risk, especially when estates up to $ 50,000 are at stake. In addition, recent litigation and controversy demonstrate the uncertainty in the current probate-summary-procedure options.

This Comment analyzes the current Wisconsin probate-summary-procedure statutes and examines recent controversies and confusions. To explore alternatives, this Comment considers the Uniform Probate Code, responses from attorneys and county officials, and legislative drafting style. Finally, this Comment offers principles and proposals for revising the Wisconsin statutes to renew the usefulness of this niche of the probate code.

Contest precluded if court approves conservator suggested estate plan

On June 26, 2008, a California appellate court ruled in Murphy v. Murphy that

when a conservator seeks court approval of an estate plan, while the subject is living, any challenge to the will must be raised at that hearing- not when the person dies.

The appellate decision is the first in the country to say attacks on wills would be barred after the estate owner dies, if there has been a court-approved substituted judgment * * *.

The opinion essentially bulletproofs the will of a person found incompetent and placed under the protection of a conservator, if the court OKs a revised estate plan * * *.

See Pamela A. MacLean, In Appellate First, Attacks on Wills Barred After Estate Owner Dies, Nat'l L.J., July 14, 2008.

Special thanks to Raymond Sheffield for bringing this article to my attention.

Top SSRN Downloads

Here are the top downloads from May 14, 2008 to July 13, 2008 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	125	Result-Selectivism in Private International Law Symeon C. Symeonides, Willamette University - College of Law, Date posted to database: May 20, 2008 Last Revised: June 26, 2008
2	114	Limited Liability Companies as Exempt Organizations Bradley T. Borden, Washburn University - School of Law, Date posted to database: June 11, 2008 Last Revised: June 11, 2008
3	88	Portability of Exemptions Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: May 5, 2008 Last Revised: May 5, 2008
4	66	Rediscovering the Duty of Obedience: Toward a Trinitarian Theory of Fiduciary Duty Rob Atkinson, Florida State University College of Law, Date posted to database: May 22, 2008 Last Revised: May 22, 2008
5	41	Marilyn Monroe's Legacy: Taxation of Postmortem Publicity Rights Joshua C. Tate, Southern Methodist University - Dedman School of Law, Date posted to database: May 15, 2008 Last Revised: July 6, 2008
6	18	Gift Tax Effects of Substituting a Lower AFR Note for a Higher AFR Note Jonathan G. Blattmachr, Bridget J. Crawford, Elisabeth O. Madden, Milbank, Tweed, Hadley & McCloy LLP, Pace University - School of Law, Author - Affiliation Unknown, Date posted to database: June 1, 2008 Last Revised: June 5, 2008
7	17	Compliance with Advance Directives: Wrongful Living and Tort Law Incentives Holly Fernandez Lynch, Michele Mathes, Nadia N. Sawicki, Author - Affiliation Unknown, Author - Affiliation Unknown, University of Pennsylvania - School of Law, Date posted to database: June 20, 2008 Last Revised: June 20, 2008