Wills, Trusts & Estates Prof Blog

Family Property Law Casebook

Thomas P. Gallanis (N. William Hines Chair in Law, University of Iowa) has just published the Fifth Edition of the book Family Property Law: Cases and Materials on Wills, Trusts, and Future Interests (Foundation Press 2011). The publisher’s description of the book is below:

Foundation Press is delighted to present the Fifth Edition of this highly regarded casebook, known for its innovative emphasis on the connection between the law of trusts and estates and the changing American family. The Fifth Edition incorporates the most recent material from the Uniform Law Commission and the American Law Institute, and discusses the very latest “hot” topics, including trust protectors, directed trusts, trust decanting, family offices, and donor standing to enforce charitable trusts.

The authors of this book have been at the forefront of law reform in the field of trusts and estates, and this tradition continues under the authorship of Thomas Gallanis, who serves as associate reporter for the Restatement Third of Trusts, as the assistant executive director of the Uniform Law Commission’s Joint Editorial Board for Uniform Trust and Estate Acts, as co-chair of the uniform laws committee within the ABA Section on Real Property, Trust and Estate Law, and as the reporter for a new drafting committee preparing a uniform law on powers of appointment.

The Fifth Edition has been reorganized to assist instructors in deciding which material to include in a standard three- or four-credit basic course in trusts and estates, and also includes material for a two- or three-credit advanced course. The book emphasizes problems and questions to facilitate classroom discussion and analysis. Among many other things, the book teaches doctrine and policy, planning and drafting, case analysis and statutory interpretation.

The teachers’ manual will be ready by early June. As revised for the Fifth Edition, the manual includes extensive syllabi and notes for classroom teaching. In addition, for instructors adopting the book, overheads and PowerPoint slides will be available, keyed to each chapter.

Migrating Trusts to New Hampshire

Joseph F. McDonald, III (Attorney at Law, Concord, NH) recently published his article entitled Migrating Trusts to New Hampshire: The “Why” and the “How", 51 N.H. B.J. 34 (Winter 2010). An excerpt from the introduction is below:

This article discusses those circumstances in which it may be possible for New Hampshire lawyers to help move a foreign irrevocable trust here, and what should be done to assist in accomplishing any given set of trust migration objectives while avoiding the many potential pitfalls in doing so. The primary focus will be on moving from the eight most proximate states in the northeast from which trust migration to New Hampshire is perhaps most likely – the five other New England states and New York, New Jersey and Pennsylvania. The analytical framework described herein for determining what must be done in those states will generally apply if you are dealing with a trust located in another state. For convenience, a trust’s current non-New Hampshire jurisdiction will occasionally be referred to as the “original trust state.”

A word of caution at the outset: there is tremendous ferment in the various state legislatures as the inter-jurisdictional competition for trust situs continues unabated (indeed, even accelerates). The trust laws in all of the states are evolving, some faster than others. Therefore, this article has a limited shelf life as an accurate resource to practitioners.

Parents Sue Facebook Over Crime Scene Photos of Dead Daughter

Caroline Wimmer, 26, was discovered by her parents after she was murdered with a hairdryer cord. Paramedic Mark Musarella took pictures at the scene and posted them on Facebook. Musarella pled guilty to disorderly conduct, forfeited his EMT certification, and was ordered to complete 200 hours of community service.

Caroline’s parents are suing Facebook in an effort to recover the image and identify who downloaded it so they can prevent further dissemination. A Facebook spokesman says that the case is without merit and that Facebook will fight it vigorously. The couple is also suing Caroline’s murderer, Musarella, the city of New York, Fire Commissioner Salvatore J. Cassano, Richmond University Medical Center, and Greenleaf Arms Incorporated.

Caroline’s mother is also traveling to the state capitol to support pending legislation that would raise this type of offense to a Class E felony and enact harsher penalties for people like Musarella.

See Jordan Ossad, Parents Sue Over Facebook Photos of Dead Daughter, CNN, Mar. 29, 2011.

Special thanks to Jerry Cooper (author, Trust Advisor Blog) for bringing this to my attention.

Pre-Embryos in Probate

Bridget M. Fuselier (Associate Professor of Law, Baylor Law School) recently published her article entitled Avoiding a Science Fiction Soap Opera: Excluding the Pre-Embryo From Probate, 74 Tex. B. J. 224 (March 2011). The introduction is below:

“The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom.” While this concept is expressed incessantly, it does not make it any easier to deal with the very difficult realities that come about as a result of the seeming warp-speed pace of scientific discovery and the glacial pace of understanding, wisdom, and a workable legal framework to go along with it. As we have seen the fertility industry develop since the first “test tube” baby in 1978, society has also witnessed the resulting legal and emotional issues that are more complicated than could have been imagined.

Civil Unions in France

When France created its civil union system in 1999, it never anticipated that there would be two civil unions per every three marriages by 2010 or that 90% of such unions would be between straight couples by 2009. French couples, for varying reasons, are increasingly shunning marriage and opting for civil unions instead. Some benefits of civil unions include:

• They allow couples to file joint tax returns.
• They exempt partners from inheritance taxes.
• They permit partners to share insurance policies.
• They make partners responsible for each other’s debts.
• They can be between homosexual couples.
• Forming a civil union requires little more than one appearance before a judge and ending one requires a registered letter.
• They provide many of the benefits that marriage does without requiring this anti-marriage generation to get married.

See Scott Sayare and Maia De La Baume, In France, Civil Unions Gain Favor Over Marriage, N.Y. Times, Dec. 15, 2010.

CLE on Trust Administration Issues for Same-Sex Spouses

The ABA Section of Real Property, Trust and Estate Law is sponsoring a 90-minute teleconference and live audio webcast entitled Same-Sex Spouses, Partners and Adult Adoptions: Trust Administration Issues with Beneficiary Relationships on April 5. The program information is below:

This program will discuss fiduciary and trust administration issues when a beneficiary has a same-sex spouse or partner.

The program will address:

• How recognition of a beneficiary’s marital status and descendants can affect the trustee’s powers and duties in the context of UTC and common law principles, state support obligations and the settlor’s intentions. Because the laws recognizing same-sex marriage differ by jurisdiction and the federal DOMA allows a state to disregard same-sex marriages, a trustee may face conflicting rules when a trust is sitused in one state and has beneficiaries residing elsewhere;
• Two high profile adult adoption cases, one of which was a substitute for gay marriage. Issues include challenges to recognition as descendants and interpretation of trust language;
• Various ways attorneys and fiduciaries can mitigate litigation risks as they navigate the complex and changing legal landscape of laws governing nontraditional relationships.

Postmortem Right of Publicity

While we think of people like Rosa Parks, Albert Einstein, Babe Ruth, and Martin Luther King Jr. as part of our cultural heritage, available for everyone to use, each of their identities are claimed as private property usable only after receiving permission and paying a fee.

For most of history, a person’s identity could not be owned. Beginning in 1953, we began construing identity as a property interest, known as the right of publicity, that could be licensed or sold. The right of publicity allows people to control the use of their images and names during their lives. The right of publicity after death is governed by state laws, which vary remarkably. While the right of publicity ends at death in some states, other states allow control to be secured for a certain amount of years, and others allow eternal control.

All the differing state laws have resulted in uncertainty regarding what is privately owned under the right of publicity. There has been much recent litigation over the right of publicity, but nothing has been clarified on a national level. “Congress should step in and enact a federal right of publicity. In doing so, it should establish clear First Amendment protections and set forth a relatively short term for the right of publicity to survive death (perhaps 10 years). Most important, the law should provide a mechanism that allows people to opt out of marketing their identities after death. After all, sometimes the dead should be allowed to simply rest in peace. “

Ray D. Madoff, The New Grave Robbers, N.Y. Times, Mar. 27, 2011.

Brooke Astor's Son and Attorney Appeal Convictions

I previously blogged about Brooke Astor’s son, Anthony Marshall, and her attorney, Francis X. Morrissey Jr., being convicted in October 2009 of a series of charges related to defrauding and stealing millions of dollars from Mrs. Astor while she battled Alzheimer’s. Justice Bartley sentenced both of them to the minimum or one to three years in prison.

The two men filed appeals to their convictions with a state appellate court in Manhattan on Monday. In these appeals, the two men argue that Justice Bartley should have questioned the jurors after one juror said that she felt threatened and asked for removal from the case. Mr. Marshall also argues that his power of attorney gave him the right to increase his manager’s salary and that his mother was competent when she signed a codicil directing millions their way. The two men remain free pending their appeal, and the prosecution must now file a response.

See John Eligon, Guilty Verdicts Appealed in Brooke Astor Will Case, N.Y. Times, Mar. 28, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.

Please Vote for the Wills, Trusts, & Estates Prof Blog!

The Wills, Trusts, & Estates Prof Blog has been nominated for the LexisNexis Top 25 Estate, Probate, and Elder Law Blogs of 2011!

To support the Wills, Trusts, & Estates Prof Blog in this competition, click here to post a comment. Each comment posted about this blog is counted as one vote. The comment period ends on March 31, 2011.

Fight Over Elizabeth Taylor's Fortune Begins

I previously blogged about Elizabeth Taylor’s fortune here and here. She requested that her jewelry collection, valued at over $150 million, be auctioned off to benefit the Elizabeth Taylor AIDS Foundation and amfAR. She split the rest of her fortune between her four children and other charities.

The money she made during her life isn’t causing any problems, but friction is already arising between family, charities, and business managers over the money she will make after death. Elizabeth Arden will continue to sell White Diamonds (which made $77 million last year), and the estate will also profit from film re-releases and other merchandising. Much like Elvis and Michael Jackson, Taylor failed to understand and plan for money made after death.

See Rob Shuter, The Fight Begins Over Elizabeth Taylor’s Fortune, Pop Eater, Mar. 28, 2011.

Economic Mobility in the U.S.

Many people think that the rich get richer while the poor get poorer. But when people think of the rich, they are thinking of people with great wealth, and when they think of the poor, they are thinking of people with low incomes. Wealth and income are not the same. To compound this problem, if government data is misunderstood or misused, it can lead to false conclusions.

In reality, between 2004 and 2007, approximately 1/3 of the households in the lowest income group graduated to a higher income group while 1/3 of the households in the highest income group dropped down. Another study conducted in 2007 shows that the median income of all the groups rose during a ten-year period except for that of the richest 1%.

For Americans, the famous axiom simply isn’t true, and economic mobility helps differentiate the U.S. from many other countries. “The power of the American economy is that it provides opportunity. The income mobility numbers make this abundantly clear.”

Steven R. Cunningham, Opinion: Myths About the Rich and Poor in U.S., Mercury News, Mar. 22, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.

Celebrities Who Hate Paying Taxes

Celebrities are often paid an exorbitant amount of money to do what they love, so it makes no sense when they don’t pay their taxes. The top ten celebrities who hate paying taxes are listed below:

1. Wesley Snipes
2. Joan Baez
3. Nicolas Cage
4. Joe Francis
5. Sinbad
6. Richard Hatch
7. Dionne Warwick
8. Pete Rose
9. Val Kilmer
10. Nas

For details regarding each celebrity, see 10 Celebs Who Hate Paying Taxes, BSchool.com, Mar. 27, 2011.

Ninth Circuit Reverses Linton

Wendy C. Gerzog (Professor of Law, University of Baltimore School of Law) recently published her article entitled Linton Reversed: Indirect Gift and Step Transaction, 130 Tax Notes No. 13 (2011). The abstract available on SSRN is below:

The Ninth Circuit recently reversed the district court’s summary judgment in favor of the government in Linton on the issues of indirect gift and the applicability of the step transaction doctrine. The circuit court’s analysis focused on the taxpayers’ donative intent. With that emphasis, the Ninth Circuit remanded the case to the district court to determine the sequence of the relevant transactions.

Top SSRN Downloads

Here are the top downloads from January 24, 2011 to March 25, 2011 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	858	The Fundamentals of Wealth Transfer Tax Planning: 2011 and Beyond John A. Miller, Jeffrey A. Maine, University of Idaho College of Law, University of Maine School of Law, Date posted to database: January 27, 2011 Last Revised: January 27, 2011
2	441	The Politics and Policy of the Estate Tax - Past, Present, and Future Michael J. Graetz, Michael J. Graetz, Columbia Law School, Yale Law School, Date posted to database: February 6, 2011 Last Revised: March 17, 2011
3	228	The Debt-Equity Distinction Robert Flannigan, University of Saskatchewan, Date posted to database: January 21, 2011 Last Revised: March 7, 2011
4	206	Exposing the Hocus Pocus of Trusts Kent D. Schenkel, New England Law - Boston, Date posted to database: February 28, 2011 Last Revised: February 28, 2011
5	206	The Economic Structure of Fiduciary Law Robert H. Sitkoff, Harvard Law School, Date posted to database: March 11, 2011 Last Revised: March 11, 2011
6	162	Estate Planning for Digital Assets Gerry W. Beyer, Kerri M. Griffin, Texas Tech University School of Law, Estate Planning and Community Property Law Journal, Date posted to database: March 9, 2011 Last Revised: March 21, 2011
7	111	Lawyers and Slaves: A Remarkable Case of Representation from the Antebellum South Jason Gillmer, Gonzaga University - School of Law, Date posted to database: February 4, 2011 Last Revised: February 4, 2011
8	109	The Prudent Investor Rule and Trust Asset Allocation: An Empirical Analysis Max M. Schanzenbach, Robert H. Sitkoff, Northwestern University - School of Law, Harvard Law School, Date posted to database: January 29, 2011 Last Revised: March 10, 2011
9	85	The Geography of Love: Same-Sex Marriage & Relationship Recognition in America (The Story in Maps) Peter Nicolas, Mike Strong, University of Washington School of Law, Unaffiliated Authors - affiliation not provided to SSRN, Date posted to database: February 9, 2011 Last Revised: February 11, 2011
10	45	Internal Revenue Code Section 170(h): National Perpetuity Standards for Federally Subsidized Conservation Easements Part 1: The Standards Nancy A. McLaughlin, University of Utah S.J. Quinney College of Law, Date posted to database: January 20, 2011 Last Revised: January 20, 2011

Tiered Investment Valuation Discounts

William H. Frazier (Senior Managing Director of Howard Frazier Barker Elliott, Inc.) recently published his article entitled Valuation Discounts in Tiered Investments, Trusts & Estates (Oct. 2010). The introduction is below:

Does the additional layer add new risks to the market value analysis? The subject of tiered discounts is a controversial one. Taxpayers may view the application of a tiered discount as a means to achieve a better tax result. Those who are already critical of valuation discounts see the additional layer of discounts as a blatant tax devise. In reality, there are times when such discounts are warranted and can be verified by similar constructs existing in the marketplace. There are other times when such discounts are, indeed, excessive and unjustifiable.

Estates and Trusts Textbook

Joel C. Dobris (Professor of Law, UC Davis School of Law), Melanie B. Leslie (Professor of Law, Benjamin N. Cardozo School of Law), and Stewart E. Sterk (H. Bert and Ruth Mack Professor of Real Estate Law, Benjamin N. Cardozo School of Law) recently published their book entitled Estates and Trusts, 4th ed. (Foundation Press 2011). The publisher’s description of the book is below:

This casebook presents a functional approach to Trusts and Estates. In addition to a focus on recent cases, the book uses questions and problems to focus student attention on issues that face estate planners, litigators and policy makers. In each chapter, it integrates discussion of drafting and planning issues with its treatment of doctrine and policy.

In addition, this casebook is accompanied by power point slides to use in explaining concepts for which diagrams are useful, such as intestate succession, the elective share, anti-lapse statutes, abatement and future interests. The unusually helpful teacher’s manual includes not only case summaries and detailed legal analysis, but detailed lesson plans and discussion questions for those new to law teaching.

Baby Boomers May Not Give Children Everything They Expect

According to a study by London-based Heartwood Wealth Management, most wealthy parents see no reason to sacrifice their own lifestyles for the sake of a child’s inheritance. Two-thirds of these parents said that while they would like to give their children something to help out, they won’t give them so much that they don’t have to work.

Once children finish college, the greatest gift a parent can give them is a lesson in self-reliance. But many of these Generation Y inheritors may not agree. If wealthy parents need assistance with these children, some banks, such as Coutts and Citi Private Bank, run courses for the children of top clients to teach them about assets and responsibility. Another option is to encourage children to pay their own way through graduate school in the U.S.

See Matthew Vincent, Inheritance: Don’t Count On It, Financial Times, Mar. 24, 2011.

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

Taylor's $600m-$1b Fortune Will Continue to Grow

Elizabeth Taylor amassed her fortune, now estimated to be between $600 million -$1 billion, mainly as an entrepreneur who branded her personality. Just because she died doesn't mean that she's finished hauling in the big bucks.  She will most likely continue making money for years to come, similar to Michael Jackson.  Elizabeth Arden has already announced that it will continue selling White Diamonds.

The question of who will receive her money is still unanswered. I recently blogged that it may go to her gay manager.  She also may have left it to her dog or to her four children, but a large chunk of it will most likely go towards AIDS. She raised more than $270 million for AIDS through her foundation, and she was very committed to the cause.

See Elizabeth Taylor’s Fortune May Approach $1B, CBS, Mar. 26, 2011.

Elizabeth Taylor's Obituary Written Over Six Years Ago

I previously blogged about the recent death of Elizabeth Taylor here and here. Though her passing brought sadness, not everyone was shocked by her death. Mel Gussow, who wrote over 4,000 pieces for The New York Times, wrote most of Taylor’s obituary over six years ago before he died in 2005. The New York Times ran this subhead with the piece: “Mel Gussow, the principal writer of this article, died in 2005. William McDonald, William Grimes and Daniel E. Slotnik contributed updated reporting.”

Mel Gussow, A Lustrous Pinnacle of Hollywood Glamour, N.Y. Times, Mar. 23, 2011.  See Nick Greene, RIP New York Times Elizabeth Taylor Obit Writer, 1933-2005, The Village Voice, Mar. 23, 2011.

Elizabeth Taylor's Gay Manager May Inherit Her £360 Million Fortune

For the last ten years, Elizabeth Taylor has kept family and friends increasingly at bay while she relied on psychics, doctors, nurses, and a coterie of homosexual ‘walkers’ to accompany her. Her closest companions tended to be homosexual and handsome, like manager Jason Winters, personal assistant Tim Mendelson, and hairdresser Jose Eber. At the center of the kingdom was Daisy, a white Maltese whose needs were paramount.

Now that she has passed away, the focus falls on Jason Winters. The two were very close, and he was the one who helped her out of severe depression and other illnesses after the end of her last marriage to Larry Fortensky. Taylor’s four children, Michael and Christopher Wilding, Lisa Todd, and Maria Burton, believe that Winters will receive Taylor’s £360 million fortune when the will is read, which could happen next week.

See Alison Boshoff, Is Liz Taylor’s Gay Manager About to Inherit her Millions?, Dailymail.co.uk, Mar. 25, 2011.