Wills, Trusts & Estates Prof Blog

Greatest estate sale of all time?

Yves St Laurent died on June 1, 2008.  Last week, Christie's conducted a three-day sale of his estate in Paris which included paintings, art objects, and furniture.

The sale brought in over $475 million which included $27.5 million for the chair pictured to the left.  So much for the bad economy ---

See Godrey Barker, St Laurent's Deco armchair sells for a record £19m, Evening Standard, FGeb. 26, 2009.

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

Top SSRN Downloads

Here are the top downloads from December 30, 2008 to February 28, 2009 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	160	The Estate Tax and the Demise of the Family Business: A Comment David Joulfaian, U.S. Department of the Treasury, Date posted to database: December 3, 2008 Last Revised: February 5, 2009
2	90	Unconscionable: Financial Exploitation of Elderly Persons with Dementia Matthew A. Christiansen, Author - affiliation not provided to SSRN, Date posted to database: October 6, 2008 Last Revised: October 8, 2008
3	86	Hurford: FLP Practice Pointers Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: February 11, 2009 Last Revised: February 23, 2009
4	69	Gross: FLP Sequence and its Consequence Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: December 2, 2008 Last Revised: December 2, 2008
5	56	In Defense of Conservation Easements: A Response to 'The End of Perpetuity' Nancy A. McLaughlin, W. William Weeks, University of Utah S.J. Quinney College of Law, Author - affiliation not provided to SSRN, Date posted to database: January 24, 2009 Last Revised: February 9, 2009
6	56	Family Values and the Law of Inheritance Anne Alstott, Harvard University - Harvard Law School, Date posted to database: February 4, 2009 Last Revised: February 6, 2009
7	54	'To Be Human': A Psychological Perspective on Property Law Jeremy A. Blumenthal, Syracuse University - College of Law, Date posted to database: January 29, 2009 Last Revised: February 10, 2009
8	35	Scalia's Ship of Revulsion Has Sailed: Will Lawrence Protect Adults Who Adopt Lovers to Help Ensure their Inheritance from Incest Prosecution? Terry L. Turnipseed, Syracuse University College of Law, Date posted to database: December 19, 2008 Last Revised: December 19, 2008
9	32	Immortal Fame: Publicity Rights, Taxation, and the Power of Testation Joshua C. Tate, Southern Methodist University - Dedman School of Law, Date posted to database: January 31, 2009 Last Revised: February 13, 2009
10	31	A Unanimous ERISA Decision by the Supreme Court Raises Troubling Questions Albert Feuer, Law Offices of Albert Feuer, Date posted to database: February 2, 2009 Last Revised: February 9, 2009

The Budget Proposal and the Estate Tax

The following message is supplied through the courtesy of William D. (Bill) Pargaman Brown McCarroll, L.L.P., Austin, Texas):

While it is not a tax bill, the budget proposal released yesterday contains a slight hint that the administration still contemplates freezing 2009 rates.  Tables S-3, S-4, and S-5 near the end of the budget proposal all contain references to projected estate taxes through 2019.  Table S-5 is the only one that gets a bit more specific.  Under the category "Adjustments to reflect current policies," it contains a line labeled "Continue the 2001 and 2003 tax cuts."  Footnote 1 to that line states "In continuing the 2001 and 2003 tax cuts, the estate tax is maintained at its 2009 parameters."

The entire budget proposal can be downloaded at: http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf

Assisted suiciders arrested

Four members of the Final Exit Network were arrested on February 25, 2009 for their role in the assisted suicide of John Celmer in Georgia.  Included among the arrestees were the president and medical director of the Network.

After an eight-month investigation, the Georgia Bureau of Investigation concluded that they violated Georgia law which prohibits helping another person to commit suicide.  It was also asserted that the Network may have played a role in approximately 200 other assisted suicides.

See Greg Bluestein, 4 members of assisted suicide group are arrested, AP, Feb. 26, 2009.

Ohio adopts Revised Uniform Anatomical Gift Act

Ohio has recently adopted the Revised Uniform Anatomical Gift Act.

2008 Ohio Laws File 164.

Adoption no longer just for the living

Michigan authorizes the adoption of deceased individuals under specified circumstances.

2008 Mich. Legis. Serv. P.A. 331.

IRC § 7520 tables deemed to reflect market value of lottery annuities

In Negron v. United States, No. 07-4460, 2009 WL 186195 (6th Cir. Jan. 28, 2009), the Sixth Circuit held that the IRC’s annuity tables properly value lottery annuities for estate tax purposes.

Writing “revoked” on photocopy of will deemed insufficient to revoke the will

Unable to secure the original copy of his will, the testator on advice of counsel signed before witnesses and had notarized a document stating that he revoked his will. He also wrote “revoked” on each page of a photocopy of the signed will.

The court in Gushwa v. Hunt, 197 P.3d 1 (N.M. 2008), held that the will was not revoked. The New Mexico revocation statute does not allow for revocation by a writing other than a will. Revocatory acts performed on a photocopy do not revoke the will.

The court remanded for consideration of whether the original will was wrongly withheld from the testator. If that were the case, the court may impose a constructive trust on the beneficiaries of the will in favor of the heirs.

Pretermitted heir statute does not apply to revocable lifetime trust

In Kidwell v. Rhew, 268 S.W.3d 309 (Ark. 2007), the court held that the Arkansas pretermitted heir statute does not apply to a revocable lifetime trust, expressly rejecting Restatement (Second) of Property, Donative Transfers § 34.2 which states that a pretermitted heir statute should apply to a will substitute.

Estate Planning & Community Property Law Journal 2009 Seminar materials now available

The written materials from the Estate Planning & Community Property Law Journal Seminar 2009 are now available for purchase for $50 from The Estate Planning & Community Property Law Journal by contacting Donna Jones.  Purchase of the materials also includes a subscription to Volume 1, a $35 value Here is a listing of topics covered at the seminar:.

• “Project Runaway—One Day You’re In as the Attorney and the Next Day You’re Out!” by Sharon Gardner; Shareholder; Crain, Caton & James, P.C.; Houston, Texas.            
• “Cryopreserved Sperm and the Shortcomings of Probate Law.” by Ben Major; Staff Editor; Estate Planning & Community Property Law Journal. 
• “To Affirmatively Disclose or to Passively Disclose, that is the Texas Trustee's Question:  What Duty of Disclosure Does a Texas Trustee Owe to a Beneficiary?” by Frank Messina; Comment Editor; Estate Planning & Community Property Law Journal.          
• “Courthouse Morals and Legislative Expectations:  A Review of Recent Cases and Proposed Legislation Impacting Texas Estate Planners.” by Gerry W. Beyer; Governor Preston E. Smith Regents Professor of Law; Texas Tech University School of Law. 
• “Is the Wind Mine to Give Away?  Guidance for Testators Wishing to Transfer a Wind Interest in Jurisdictions that have not Recognized Wind as a Property Right.” by Chris Hartman; Staff Editor; Estate Planning & Community Property Law Journal.
• "An Arm and a Van Gogh:  Selling Art Collections from Charitable Contributions for Capital Gain is a High Price to Pay.” by Megan Loving; Staff Editor; Estate Planning & Community Property Law Journal.
• “Tricks and Traps in the Land of Enchantment:  New Mexico Probate, Community Property, and Trust Issues for Texas Attorneys.” by Scotty Holloman; Shareholder; Maddox, Holloman & Kirksey, P.C.; Hobbs, New Mexico.            
• “On Death and Dying: Counseling the Terminally Ill Client and the Loved Ones Left Behind.” by Associate Judge Georgia H. Akers; Harris County Probate Court No. 3; Houston, Texas.
• “Valuation Discounts—The Good and the Bad.” by Charles King; Shareholder; Sprouse Shrader Smith P.C.; Amarillo, Texas.
• “The Socially Endorsed, Legally Framed, Normative Template:  What Have In Re Marriage Cases Really Done for Same-Sex Marriage?” by Meghan McCalla; Articles Editor; Estate Planning & Community Property Law Journal.
• Dynamics of Estate Planning for the Family and Family Business - Grantor Trusts (GRATS vs. IDGTS): Do You Digit, or Do You GRAT?” Jeff Myers; Shareholder; Bourland, Wall & Wenzel, P.C.; Fort Worth, Texas.

Prof. Gallanis accepts chaired position at University of Iowa

Thomas P. Gallanis of the University of Minnesota has accepted a chair at the University of Iowa, to start July 1, 2009.

He specializes in trusts and estates, first-year Property, and English legal history.

Congratulations, Tom!!

Preventing estate litigation CLE

The American Bar Association Section of Real Property, Trust & Estate Law is sponsoring a teleconference and live audio webcast on March 3, 2009 entitled Feuds and Flashpoints: Detecting and Defusing Potential Estate Litigation During Estate Planning and Post Mortem.

Here is a description of the program:

Conflicts can easily arise during the estate planning process or post-mortem. The traditional goals of avoiding taxes and probate often ignore the potential for conflict. Litigation may reduce the amount heirs receive as much or more than probate and taxes while irreparably harming family relationships.

This teleconference and live audio webcast will cover the following topics and more:

• How to use a "Flashpoint Detector Questionnaire" that can identify most potential estate litigation.
• Alternative ways and times that estate planning and estate litigation attorneys can assist their clients in avoiding or better managing estate litigation.
• How to manage estate conflict to deliver much more financial and emotional value to clients, provide higher client satisfaction, and higher personal satisfaction and more client referrals to the practitioner.

Gift to “lawful” descendants excludes non-marital children

In a case of first impression in Washington, the court in the case of In re Estate of Wright, 196 P.3d 1075 (Wash. Ct. App. 2008), held that the use of the word “lawful” to modify the term descendants limits those who may take to persons born during a valid marriage.

The court also held that enforcing the testator’s exclusion of non-marital children is not a violation of the Equal Protection Clause of the Fourteenth Amendment.

A home held in trust qualifies for homestead protection but the express language of the testatrix’s will made it subject to creditors

The testatrix transferred her home and the adjacent vacant lot to a trust of which she was the sole beneficiary for life. On her death, the properties were to be distributed to her estate and her will devised the home to her daughter and the vacant lot to her son.

The will also stated that all claims, charges, allowances, and costs of administration were to be paid equally out of the two gifts to her children. The residuary estate was insufficient to pay all of the claims on testatrix’s estate and her daughter claimed that the home was exempt as homestead property.

In Cutler v. Cutler, 994 So. 2d 341 (Fla. Dist. Ct. App. 2008), the court held that the home did not lose its status as homestead because of the transfer to the trust but that the language of the will made the home subject to the testatrix’s debts.

Control over non-probate property devices not a per se denial of elective share rights

The decedent had created a funded inter vivos revocable trust which on his death was for the sole benefit of his daughter by a prior marriage.

His widow renounced the will and claimed her statutory one-third share of decedent’s estate under Maryland’s forced share statute.

In Karsenty v. Schoukroun, 959 A.2d 1147 (Md. 2008), the court held that retention of control by the decedent was not enough to make an inter vivos transfer subject to the elective share and remanded for a determination of whether or not the transfer was intended to frustrate the spouse’s martial rights.

Order issued regarding Helmsley Trust

An order was recently signed by Surrogate Webber in New York regarding the Leona M. and Harry B. Helmsley Charitable Trust which is the sole residuary beneficiary under Leona's will.

The trustees had filed an action asking the court to determine the scope of their discretion to apply trust funds for charitable purposes. 

The "mission statement" of the trust dated March 1, 2004 provides that the trustees may make grants for "(1) purposes related to the provision of care for dogs; and (2) such other charitable activities as the Trustees shall determine."

The trustees asserted that this mission statement was revoked by later documents. 

The Attorney General of the State of New York, representing potential charitable beneficiaries, successfully claimed that this issue is irrelevant because the trust expressly states that the trustee's discretion is not limited by mission statements. 

Accordingly, the court held that "the trustees may apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine."

See Estate of Leona M. Helmsley (2968/07) as reported in New York Law Journal, Feb. 24, 2009, at 33.

Special thanks to Mark Bekerman (Associate Director of NYLS Graduate Tax Program) for bringing this opinion to my attention.

Expectancy to be the beneficiary of a living testator may be assigned

The testator’s child and her siblings signed an agreement relating to the testator’s care agreeing that the child would buy the testator’s home, that the testator would be placed under conservatorship, and that any conservatorship funds remaining at the testator’s death would belong to the child.

After the testator’s death, her will was admitted to probate and the remaining funds distributed under the will in equal shares to the testator’s children. The child’s suit against her siblings was dismissed by the trial court.

However, both the immediate appellate court and the state’s supreme court held that a prospective beneficiary may assign an expectancy under a will and that the child must have the opportunity to prove the existence of consideration, lack of fraud, and that the agreement embodied the parties’ intent. The child would also have a cause of action based on promissory estoppel. Rector v. Tatham, 196 P.3d 364 (Kan. 2008).

Will Hawaii become the 5th state to recognize civil unions?

Recent developments in Hawaii may lead to the state becoming the fifth to recognize same-sex civil unions.  (Massachusetts and Connecticut allow same-sex marriage; California recognizes domestic partnerships; Connecticut, New Jersey, New Hampshire, and Vermont permit civil unions).

Here are some details from Mark Niesse, Hawaii is latest civil unions battleground, AP.com, Feb. 22, 2009:

• Hawaii was the first state to enact a defense of marriage constitutional amendment.
• The Hawaii house has already passed a same-sex civil union bill.
• A Senate committee will vote on the bill tomorrow (February 24, 2009).
• Governor Linda Lingle has not indicated whether she would sign or veto the bill.

Heath Ledger's life insurance

Earlier today, I discussed the ramifications of Heath Ledger's winning of the Best Supporting Actor Oscar.

Another issue regarding his estate has also been recently settled.

At the time of his death, Heath had a life insurance policy for $10 million payable to his daughter, Matilda.  The insurer, ReliaStar Life Insurance Company, was reluctant to pay for two reasons.  First, there were allegations that Heath's death was suicide, rather than accidental.  Second, Heath may have lied on the life insurance application by stating that he never used illegal drugs.

A settlement has been reached but the terms are unknown.

See Heath Ledger Life Insurance Case Settled, TMZ.com, Jan. 29, 2009.

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

Court attorney says Peter Falk does not need conservatorship

Earlier on this blog, I reported that actor Peter Falk's (aka Columbo) daughter (Catherine) had petitioned the court to take over her father's affairs claiming that he was suffering from Alzheimer's.

On February 19, 2009, the court appointed attorney (Clark R. Byam) filed a report in the Los Angeles Superior Court concluding that there is no ground to support placing Catherine in charge of her dad's affairs.  Byam met with Peter, his wife, his business manager, and others.  He found that Peter was "well-dressed, clean and composed."

The court hearing on this case is scheduled for today (February 23, 2009).

See AP, Peter Falk's care is adequate, USA Today, Feb. 20, 2009.