Wills, Trusts & Estates Prof Blog

NYC AV Rated Trusts & Estates Boutique Firm Seeks Associate or Counsel

A NYC AV rated trusts & estates boutique firm is seeking a mid-level Associate to Counsel level attorney.

Immediate Hire.

3-15+ years Trusts, Estates, and Probate experience required.

Part Time or Full Time.  Flexible schedule.  Sophisticated Practice in collegial environment.

Please submit resume to Norma Singh at nsingh@mtrustlaw.com.  

Casket Falls and Cracks Open During Burial

In May 2008, the burial of Robert Gowdy, Sr., allegedly when horribly wrong. The family is suing the the City of Mesa, Arizona, cemetery workers, a funeral home, and a casket company after Gowdy's casket allegedly dropped and cracked open while being lowered into his grave.  It is alleged that cemetery workers ran from the scene of the accident.

See AP, Family jumped into grave after casket crumbled, suit says, Boston Herald, Nov. 28, 2009.

Illinois: Changes Promote Private Trust-Admin. Settlement Agreements

Lyman W. Welch (partner, Sidley Austin LLP) & Susan T. Bart (partner, Sidley Austin LLP) have published their article entitled New Law Promotes Private Trust-Administration Agreements, 97 Ill. Bar J. 562 (2009).  

The following is an excerpt taken from the beginning of the article:

Effective January 1, 2010, the Illinois Trusts and Trustees Act has been revised to significantly expand the use of nonjudicial settlement agreements in resolving disputes, ambiguities, and operational difficulties in trust administration.  The revision removes limitations of the original section 16.1 of the Act, which applied only if all "primary beneficiaries" were adults and not disabled.  Further, it greatly expands what can be properly addressed by nonjudicial settlement agreements.

Response to Treating Earned & Inherited Wealth Differently for Federal Estate Tax Purposes

I recently reported on a New York Times op-ed piece by Ray D. Madoff entitled Protect the Farm, Tax the Manor, which argues for a much larger federal estate tax exemption for estates consisting primarily of family farms and businesses than estates consisting of inherited wealth.

On Saturday, Nov. 28, the Times published four letters to the editor in response to Madoff's op-ed piece.  The following summaries of these letters is taken from Hani Sarji, Readers respond to Ray D. Madoff's recent New York Times op-ed proposal, Future of the Federal Estate Tax, Nov. 20, 2009:

The first letter, by Robert Miller, highlights what he views as socialist overtones in Madoff's proposal. Miller thinks that Madoff's plan "echoes" Karl Marx. He also thinks that Madoff's plan discriminates against the estates of wage earners. He concludes by writing, "I earned that money and paid my taxes on it. It is mine and I want to give it to my hard-working kids, not to the government."

The second letter is by Melissa P. Walker, a trusts and estates lawyer in Atlanta. Walker would keep the exemption amount and rate as they currently are, and she would not give farmers and small business owners the special treatment that Madoff proposes. Walker believes that such provisions are already in the tax Code. She also believes that Madoff discriminates against "estates built through savings and investments."

The third, and longest, letter is by Steven Baker, a CPA in Florida. Baker strongly feels that farmers and small businesses already get special treatment. He writes, "After practicing estate planning for more than a decade, I can attest that I have yet to see a family farm or small business go under because of the estate tax."

The fourth letter is written by Michael Hepner, a benefits professional, and [Hani Sarji]. [They] argue that Madoff creates a "a false dichotomy between good and bad wealth."

See also N.Y. Times, My Estate Tax, Your Family Business, Nov. 28, 2009,

Tips for Avoiding Estate Litigation

US News reports that poor economic conditions have led to more estate litigation. While wealth transfers have increased over the past 20 years, currently reduced asset values make for a smaller pie and returns that are smaller than excepted.  Longevity and increased family complexity (2nd and 3rd marriages, for example) only add to disputes. 

US News suggests the following key tips for avoiding estate litigation.

1. Select a good, solid attorney who hasn't done any work for any of your beneficiaries.
2. Select an executor who can get along with your family, perhaps even a professional fiduciary if no one else could successfully fill this role.
3. Discuss your intentions with family before the will is drafted, taking away the surprise after death and making loved ones aware of personal wishes and desires.
4. Take state law into account, creating trusts to bypass probate if probate is especially burdensome under applicable state law.
5. Update the will or trust often so that challenges become more difficult.
6. Title assets appropriately so that the assets pass through or outside probate as intended.
7. Consider a no-contest clause coupled with testamentary gifts adequate to discourage disputes.  
8. Allow the estate some leeway with distribution of assets so that beneficiaries can agree to a distribution that suits them best.  

See Phillip Moeller, 8 Tips to Avoid Nasty Estate Surprises, U.S. News, Nov. 27, 2009. 

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

More on In re Estate of Feinberg

Helen W. Gunnarsson (attorney, Highland Park, Illinois) has published an article entitled Illinois Supreme Court upholds Jewish-marriage clause in trust provision, 97 Ill. Bar J. 549 (2009).  The article discusses In re Estate of Feinberg, which is also discussed here and here. 

The introduction to the article is below:

A clause from a testamentary trust providing that its assets are to be distributed to the testator's grandchildren, except for any grandchild who might marry a non-Jew or whose non-Jewish spouse did not convert within one year of marriage, does not violate public policy when employed as a condition precedent of a gift of the trust's assets, a unanimous Illinois Supreme Court has held. The case is In re Estate of Feinberg, 2009 WL 3063395 (Ill Sup Ct).

Top SSRN Downloads

Here are the top downloads from September 29, 2009 to November 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	290	2009 Federal Tax Update Samuel A. Donaldson, University of Washington - School of Law, Date posted to database: October 13, 2009 Last Revised: October 13, 2009
2	161	Miller: Effective FLP Line Drawing Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: October 12, 2009 Last Revised: October 12, 2009
3	148	Conflicts of Interest and Nonprofit Governance: The Challenge of Groupthink Melanie B. Leslie, Cardozo Law School, Date posted to database: September 25, 2009 Last Revised: October 20, 2009
4	122	Section 6694 Preparer Penalties and Tax Advice: The Latest on the Constantly Moving Target Scott A. Schumacher, University of Washington, Date posted to database: September 11, 2009 Last Revised: September 11, 2009
5	102	Navigating the Deaccessioning Crisis Derek Fincham, Loyola University New Orleans College of Law, Date posted to database: September 8, 2009 Last Revised: November 18, 2009
6	92	Did a Unanimous Supreme Court Misread ERISA, Misread the Court's Precedents, Undermine Basic ERISA Principles, and Encourage Benefits Litigation? Albert Feuer, Law Offices of Albert Feuer, Date posted to database: October 12, 2009 Last Revised: October 12, 2009
7	74	Rethinking Trust Law Reform: How Prudent is Modern Prudent Investor Doctrine? Stewart E. Sterk, Yeshiva University - Cardozo Law School, Date posted to database: September 22, 2009 Last Revised: September 27, 2009
8	69	Preventive Adjudication Samuel Bray, Columbia Law School, Date posted to database: October 8, 2009 Last Revised: October 15, 2009
9	50	Tax Court Fumbles Substance-Over-Form Ball in Estate of Brown Paul L. Caron, University of Cincinnati - College of Law, Date posted to database: November 4, 2009 Last Revised: November 7, 2009
10	49	A Well-Reasoned But Incorrect QDRO Decision Pertaining to Life Insurance Payments from an ERISA Plan Albert Feuer, Law Offices of Albert Feuer, Date posted to database: September 7, 2009 Last Revised: October 26, 2009

Searching for a Missing Will

The following "article" recently appeared in the Law Society Gazette and is actually a classified ad in search of a missing will:

Calling all probate solicitors. Do you recall acting for a ‘somewhat eccentric and secretive’ millionairess called Judy Maude Keele, some time in the past century? To refresh your memory, she owned a flat in Mayfair, drove a classic sports car, and reputedly built up a large collection of fine art and jewellery. She married a prominent Chicago lawyer, but on getting divorced returned to London in 1958. Keele died in New York in 1998, and while she is understood to have made a will in the UK, her solicitor is unknown and the document cannot be found. Lichfield lawyers Keelys are now on the case, and have even called in famous art detective Charles Hill, who apparently took part in an undercover operation to recover Edvard Munch’s famous picture The Scream – a portrait of a solicitor looking at his professional indemnity bill this October – when it was stolen from the Norwegian National Gallery in 2004. Anyone with knowledge of Keele’s will or possessions is asked to contact Keelys litigation partner Michael Phillips at mphillips@keelys.co.uk.

Heir Hunting, Law Society Gazette, Nov. 26, 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.

Common SOL Problems For Estate Planners

Jerry Frank Jones (attorney, Austin) & Laurie Ratliff (attorney, Austin) have published their article entitled Statute of Limitations Issues in the Probate, Guardianship & Trust Context, The Advocate, Fall 2009, at 81.  

The following is an excerpt from the introduction of the article:

The focus of this paper is to highlight common statute of limitations issues in probate, guardianships and trusts.  Some time limits (such as filing a bond) are discussed, even though they are not technically statues of limitations.  They are mentioned because they may be important in monitoring the actions of a fiduciary to avoid his being (or to cause him to be) driven from his office. 

Paralyzed Man Reportedly Trapped Inside Body for 23 Years

A Belgium man reportedly spent 23 years trapped inside his paralyzed body until doctors discovered that he was conscious after a brain scan three years ago.  Now, using his right hand and a special touchscreen, the man has communicated that he could always hear what was going on around him but was unable to communicate this fact. 

See Kate Connolly, Trapped in his own body for 23 years - the coma victim who screamed unheard, Guardian, Nov. 23, 2009. 

CLE: Paying Estate Taxes With a Loan

The ABA section of Real Property, Trust and Estate Law is sponsoring a teleconference and live audio webcast CLE entitled Black, White, and Grae(gin): Borrowing to Pay Estate Taxes on Dec. 8, 2009.  

Here is information about the program:

A "Graegin loan" is a popular option for estates that lack enough liquid assets to pay estate taxes and other expenses incurred during the administration of an estate. A Graegin loan is often utilized in estates of decedents whose major asset was an interest in a closely-held business. Instead of selling the business interests, the estate can borrow cash from the business in exchange for a promissory note. There are several potential advantages to borrowing money to pay estate taxes and other expenses of administration. This program will address the economics and mathematics of Graegin loans including: 

• Financing and funding 
• Liability and litigation 
• Death and deductions 
• Use and usury 
• Administration and audit 
• Regulations and re-financing

First Time Litigating in Probate Court?

Judge Gladys B. Burwell (Probate Court, Galveston County, Texas) has published her article entitled Suggestions for the First Time Litigator in Probate Court, The Advocate, Fall 2009, at 94. 

The following is an excerpt from the article:

The attorney coming to the probate court for the first time just needs to remember that the Rules of Civil Procedure apply to all cases and then they need to become familiar with the additional requirements of the Probate Code, and most particularly, in what court their case will be tried. 

House to Vote on Estate Tax Legislation

The House of Representatives is scheduled to vote next week on the estate tax bill introduced by Rep. Pomeroy (D-ND).  As previously discussed, this bill would make the current estate tax rate and exemption amount permanent.  

Although this bill is backed by President Obama, "there are enough opponents of the Pomeroy bill to block action in the Senate."  Martin Vaughan, US House To Vote On Permanent Estate Tax Bill Next Week, Dow Jones Newswires, Nov. 25, 2009. 

Special thanks to Hani Sarji (LL.M in Tax candidate at New York Law School) for brining this to my attention. 

Guardianship Litigation Fundamentals

Don D. Ford III has published his article entitled Fundamental Issues to Understand Before Accepting a Guardianship Litigation Engagement, The Advocate, Fall 2009, at 77.

An excerpt from the article is below:

Among other things, a litigator engaged in guardianship litigation should understand how a guardianship is properly initiated, who has proper standing to participate in the proceeding, the importance of the Doctor's Letter, and the role of the ad litems in the process.  Additionally, because of the financial/fiduciary issues involved in guardianships of an estate, guardianship litigators must understand the stringent accounting and reporting requirements imposed on guardians each year.  These accounting requirements and the financial issues related thereto breed significant litigation issues, which can result in personal liability not only for the guardian but also for the judge presiding over the case. 

Happy Thanksgiving

 
Happy Thanksgiving!!
   

The Lasting Impact of Suicide

I've posted a number of blogs covering assisted suicide but few regarding the potential impacts of a suicide.   The following, taken from Colleen Mastony, Witnesses to suicide: A man takes his life, and those who see it are forever haunted, Chicago Tribune, Nov. 15, 2009, recounts the aftermath of the suicide of a 23-year old man in Chicago:

[T]he many strangers who witnessed his death still wonder who he was and why he chose to die. For weeks they posted messages to an online news comment board, sharing their questions, their sympathy and shock. Their lives, they say, will never be the same.

One man makes a point of telling his children that he loves them before he hangs up the phone. A doctor spends extra time with a patient who seems sad. An 11-year-old boy goes to bed praying for "the man under the blanket."

Passing Retirement Plan Assets

A recent Wall Street Journal article discusses the basics of passing retirement plan assets after death, covering the following:

• The use of beneficiary designation forms to pass the retirement plan assets to chosen loved one.
• The benefit of leaving retirement plan assets to a trust for the benefit of loved ones who can't manage the assets.
• The role a durable power of attorney may play for a beneficiary spouse who later becomes incapacitated.

See Kelly Greene, How to Hand Down Assets in Retirement Plans, WSJ, Nov. 21, 2009.

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

Estate of Just For Feet CEO in Accounting Dispute

The probate court of Alabama is currently hearing an accounting dispute over the Estate of Harold Ruttenberg, former CEO of Just for Feet.  The personal representatives of the estate seek approval of their actions and over $15 million dollars in their petition for final settlement.  Two Ruttenberg estate beneficiaries contest the claimed expenses, asserting that money was misappropriated in violation of Alabama Code and that a conflict of interest among lawyers essentially caused the estate to overpay on a $15 million settlement agreement.

In re Estate of Harold Ruttenberg, Probate Court of Jefferson Country, Alabama.

Creditor Claims Process in Texas Probate Courts

Gus Tamborello (attorney, Houston) has published his article entitled Creditor Claims in Independent and Dependent Administrations in Texas-Beware of the Trap Doors!, The Advocate, Fall 2009, at 49.

 The following is the introduction to the article:

Handling creditor claims in Texas probate court is a bit like creeping through a haunted house-- confusing and downright scary.  The Texas Probate Court sections pertaining to creditor claims are often the most misapplied and misunderstood statutes in the probate process. At first blush, there appears to be no rational organization or specific applicability to an independent or dependent administration.  Hence, a clear understanding of the creditor claims process is imperative if we are to guide our clients who are personal representatives, creditors, and beneficiaries through this frightening maze unscathed.

Reverse Mortgages -- A disaster waiting to happen?

The potential pitfalls of reverse mortgages are detailed in Reversals of Fortune, Consumer Reports, Sept. 2009, at 35.

Here is an excerpt from the article:

Reverse mortgages can be valuable as a last resort for seniors who want to stay in their homes and have significant equity but need money to supplement income or banish an existing mortgage payment. With a reverse mortgage, they can trade some of that equity for a lump sum and monthly payouts.

But those loans can be terrible for customers who don't understand the complicated rules governing them and how quickly high fees and interest charges can balloon. They can end up stranded in their homes without any remaining equity to cover unexpected costs later in life.

Use of the loans is exploding as lenders—who shoulder almost no risks—push them to the growing ranks of retired baby boomers, especially for spending on vacations, new cars, and more.

Lawmakers and regulators are getting worried.