Wills, Trusts & Estates Prof Blog

Article Valuation Discounting and the Lottery

Wendy C. Gerzog (Professor, University of Baltimore School of Law) recently published an article entitled, Valuation Discounting and the Lottery Cases, Tax Notes, Vol. 137, No. 8, 2012. Provided below is the abstract from SSRN:

The article describes the valuation discounting in the Dickerson case and contrasts that to discounting in other lottery cases.

Article on Formal and Informal Testamentary Promises

Alexandra Braun (CUF Lecturer, Oxford Law) recently published her article entitled Formal and Informal Testamentary Promises: A Historical and Comparative Perspective, Oxford Legal Studies Research Paper No. 65/2012.  The abstract from the article available on SSRN is below: 

Since time immemorial people have made promises to leave something by will to another person. Quite often such testamentary promises are made in exchange for some type of service and thus relied upon by the promisee. But sometimes, the promise is not fulfilled. As a consequence, a clash arises between the need to protect the freedom of the testator to change his or her will and the need to safeguard the interests of those relying on the promise. Law-makers on both sides of the Channel have always struggled with the enforcement of testamentary promises, which represent an unsettled area of the law. This article compares German and English law in the area of formal and informal testamentary promises. It looks at how both legal systems regard promises to make wills, be they contractual or not, and compares the remedies they currently award to those who, in reliance on a promise or assurance, assist or provide a service for the testator. In doing so, it not only investigates the rationale and scope of §2302 BGB, and the reasons why German law does not enforce contracts to make wills, but also outlines potential difficulties in the ways in which legislatures and courts tackle especially informal testamentary promises both in Germany and in England.

IRS Nonacquiescence in the Wandry Case

As I have previously discussed, the Internal Revenue Service (IRS) withdrew its appeal to the Tenth Circuit Court of Appeals in Wandry v.Comm'r. In Wandry, the tax court held that the use of a formula gift clause was an appropriate method to avoid an inadvertent gift tax on property that could be re-evaluated by the IRS to exceed the amount that was gifted. Recently, the IRS has released Internal Revenue Bulletin: 2012-46. In the bulletin, the IRS explained that the Service does not acquiesce in the decision in Wandry. This means that the IRS commissioner does not agree with the decision the court and will not follow the ruling in cases that involve other taxpayers nationwide. However, there is one exception to this in that the "Service will recognize the precedential impact of the opinion on cases arising within the venue of the of deciding circuit."

See Internal Revenue Bulletin 2012-46, IRS, Nov. 13, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Reclusive Millionaire Leaves Fortune to Town

John J. Osborne was a man that lived in Belleair, Florida, and that is probably all that his neighbors and the town knew of the man. He lived alone where he kept to himself. His neighbors described him as a man that "seemed polite." So it came as a surprise to the town where he lived when he decided to give them his entire estate, which included $4 million worth of stock. The town manager, Micah Maxwell, stated that he guesses that Mr. Osborne must have loved the town although he admitted that he never would have guessed it. The only interaction that Mr. Osborne had with the town's officials was that he would frequent Belleair's building department. There he would often research properties that he probably considered purchasing. 

Mr. Osborne's true motives are still mystery. Maxwell thinks that he might have received the idea from another one of Belleair's residents who gave the town her waterfront home. The testator, Eleanor Thompson, "asked the town to convert the property to park." The town has yet to receive the money because the estate is still going through probate. They are expected to receive the money sometime next year. Mr. Osborne recently passed away from cancer. His was survived by his sister in New York.

See Stephanie Wang, Little-known Man Leaves Belleair His $4 Million Estate, Tampa Bay Times, Nov. 13, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Top SSRN Downloads

Here are the top downloads from September 18, 2012 to November 17, 2012 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	247	Planning in the Digital Age Gerry W. Beyer, Texas Tech University School of Law, Date posted to database: October 24, 2012 Last Revised: November 12, 2012
2	207	Shareholder Fiduciary Accountability: No Duty to the Minority Robert Flannigan, University of Saskatchewan, Date posted to database: September 17, 2012 Last Revised: October 22, 2012
3	180	Manipulating the Conduct of Beneficiaries with Conditional Gifts Gerry W. Beyer, Texas Tech University School of Law, Date posted to database: September 26, 2012 Last Revised: September 26, 2012
4	98	Case Law Update Gerry W. Beyer, Texas Tech University School of Law, Date posted to database: September 21, 2012 Last Revised: October 3, 2012
5	91	Another Turn with Turner Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: September 26, 2012 Last Revised: September 26, 2012
6	77	Justifying Fiduciary Remedies Paul B. Miller, Queen's University (Canada) - Faculty of Law, Date posted to database: October 28, 2012 Last Revised: October 28, 2012
7	68	How the Supreme Court and the Department of Labor May Dispel Myths About ERISA’S Family Law Provisions and Protect the Benefit Entitlements that Arise Thereunder Albert Feuer, Law Offices of Albert Feuer, Date posted to database: September 29, 2012 Last Revised: October 6, 2012
8	58	How to Conduct an Illinois Will Execution Gerry W. Beyer, Eugene Kozob, Texas Tech University School of Law, Unaffiliated Authors - affiliation not provided to SSRN, Date posted to database: October 13, 2012 Last Revised: October 13, 2012
9	56	'Perpetual Trusts: The Walking Dead' and 'Congress Should Effectively Curb GST Exemption for Perpetual Trusts' Lawrence W. Waggoner, Calvin H. Johnson, University of Michigan at Ann Arbor - Law School - Faculty University of Texas at Austin - School of Law, Date posted to database: September 18, 2012 Last Revised: September 24, 2012
10	55	A Therapeutic Jurisprudential Framework of Estate Planning Mark Glover, Louisiana State University - Paul M. Hebert Law Center, Date posted to database: September 30, 2012 Last Revised: September 30, 2012

Article on Investing in a Recession

Robert L. Moshman, Esq. (Attorney, New York and New Jersey) recently published his article entitled, Surviving the Great Consternation Investing and Elder Care in the Age of Recession, Wealth Strategies Journal (Sept. 3, 2011). An excerpt from the article provided by Wealth Strategies Journal is below.

                            "It's a recession when your neighbor loses his job; 
it's a depression when you lose yours." 
--Harry S. Truman

The time of the Great Consternation is upon us. The reality of the next potential recession has gripped the national psyche. 

In summary: Our nation is grappling with economic woes, layoffs, the debt ceiling, gridlock, a downgraded credit rating, and global market turmoil. Just toss in a dash of rioting in London for good measure and you have the makings of quite an unpleasant stew. 

Will this mean a major recession is upon us? When will it happen? How bad will it be? What should everyone do? 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Iowa Supreme Court Denies Widow Insurance Benefits

The Iowa Supreme Court recently ruled that an insurance company does not have to cover the property damage suffered by a widow when her husband burned down their house to commit suicide.

In 2009, while Michelle Postell and her husband were separated, he poured gasoline and lit the house on fire to kill himself.  Michelle Postell had a fire insurance policy with American Family insurance and she had paid the premiums on that policy for 20 years.  However, the court ultimately ruled that she did not qualify for help under her longstanding policy because her husband intentionally caused a loss.  Even though she had nothing to do with the fire, she still cannot recover. 

See Court: Iowa Widow Cannot Recover Damages, DesMoinesRegister.com, Nov. 16, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Sam Raimi Sues Same Insurance Broker That De-Frauded Tom Hanks

As I have previously discussed, insurance broker, Jerry B. Goldman, defrauded Tom Hanks and a host of other celebrities by charging them more for their insurance premiums than their policies required. Now, Director Sam Raimi has brought a lawsuit against Goldman for "fraudulent concealment, professional negligence, unjust enrichment and more." This is in addition to the federal indictment that was granted on November 7, 2012.

In the suit, Raimi claims that Goldman was his homeowners and personal liability insurer for the past 7 years. In 2011, Raimi claimed that he discovered that Goldman was charging him more than what his policy stated he should be paying. Eventually, Raimi learned that Goldman overcharged him a total of $72,783. This discovery would lead Raimi to discover other acts of misconduct on the part of Goldman, such as "withholding or failing to refund unearned premiums, commissions and fees from canceled policies." Raimi also alleged that Goldman would illegally issue certificates of insurance. Raimi has requested both compensatory and punitive damages.

See Alex Ben Block, Director Sam Raimi Sues Insurance Broker For Fraud, The Hollywood Reporter, Nov. 16, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Lessons From Zsa Zsa Gabor's Estate Gone Awry

As I have previously discussed, Zsa Zsa Gabor has had her share of probate problems. Most recently, her husband Prince Frederic von Anhalt won a temporary conservatorship over her and the management of her property. Now, it looks as if the probate court is set to invalidate the power of attorney that granted her husband nearly unlimited power in controlling both her health care and her finances. The court has stated that he must now provide monthly reports to her daughter, Francesca. Furthermore, the court stated that he can no longer keep Francesca from her mother. Francesca won a huge victory because it was she who originally alleged that Prince von Anhalt was abusing his position of power. Francesca alleged that he abused his power by using her "money for birthday parties, billboards, and his own mayoral campaign in L.A." As I have discussed in the past, Francesca also accused Prince von Anhalt of sedating her mother and intentionally keeping Francesca from seeing her.

The lesson that we can learn from this instance is the importance of choosing a good fiduciary. A person should make a thoughtful decision considering who should be appointed to make decisions on that person's behalf. Not only will it ensure that the fiduciary follows the person's wishes, but it very well could prevent probate fights over the control of that person's property. 

See Bonnie Bowles, Zsa Zsa Gabor Might Have Chosen A Better Fiduciary, examiner.com, Nov. 15, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.