Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

A Member of the Law Professor Blogs Network

Saturday, December 8, 2012

Another Powerball Winner Comes Forward, Prefers to Remain Anonymous

UnknownMark and Cindy Hill of Dearborn, Mo. were the first to claim their half of the multistate Powerball prize.  Recently, a man who wishes to remain anonymous and his wife claimed their half of the $587.5 million Powerball jackpot.  After speaking with financial advisers, the couple decided to collect $192 million before taxes now to avoid potentially higher taxes in 2013. 

The couple checked their numbers over and over again because they couldn't believe that they won, and they took the whole weekend to try and recover from the shock. 

The man and his wife want to take time to make a solid financial plan and set up a charitable entity to aid causes that he and his wife support.  The anonymous man enjoys his job and has no intention of quitting soon, but lottery officials will not say what he does.

See Arizona Lottery Winner Takes His Half of $588M Now, Not in 2013, msnNews, Dec. 7, 2012.

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

December 8, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Happy Hanukkah

Hanukkah

Greetings,

To all my readers of the Jewish faith, please accept my best wishes for Hanukkah.

Gerry

December 8, 2012 in About This Blog | Permalink | Comments (0) | TrackBack (0)

Article on Testamentary Diposition of Non-probate Assets

Unknown-2Ashley L. Haskins (J.D. May 2012, University of Arkansas at Little Rock) recently published her note entitled Estate and Probate Law--Testamentary Disposition of Non-probate Assets: Whether IRAs are Comparable to Life Insurance Policies and Whether Testators Should Be Able to Change an IRA Beneficiary By Will (Nunnenman v. Estate of Grubbs, 20120 Ark. App. 75, _S.W.3d_.), 34 U. Ark. Little Rock L. Rev. 153-171 (2011).  The introduction to the article is available below: 

Most courts have held that any attempt to change the beneficiary of a life insurance policy by will is ineffectual where the policy "specifies the manner in which the change may be made."  Rather, a policyholder must adhere to the insurance company's procedure for amending a beneficiary designation in order for a modification to be valid.  Contrary to the consensus of a vast majority of the states, Arkansas law recognizes testamentary changes to insurance beneficiaries as long as the insurance policy to be changed is specifically identified, and the testator's intent to change the beneficiary is clear. Arkansas courts, however, have not been confronted with the issue of whether this unique doctrine should be extended to other non-probate assets until recently. Nunnenman v. Estate of Grubbs  considered whether a purported amendment to a beneficiary designation by holographic will effectively changed the beneficiary of an individual retirement account (IRA). 

In Estate of Grubbs, the decedent named Nunnenman as the sole beneficiary of his IRA.  On the account, Nunnenman "was identified by name, social security number, and date of birth."  Two years later, the decedent died following a brief hospitalization. Significantly, days before his death,  the decedent executed a last will and testament that left his entire estate to his mother, Shervena Grubbs. Although the IRA was not specifically referenced in the will, Ms. Grubbs argued she was the rightful beneficiary. She attempted to support her argument by proffering a handwritten note that purportedly changed the beneficiary designation on the decedent's IRA from Nunnenman to Ms. Grubbs. 

The appellate court refused to uphold the testamentary change to the decedent's IRA.  The importance of this case, however, rests in dicta where the court insinuates it would have affirmed the district court's extension of the law for insurance policies to IRAs if the handwritten note had qualified as a valid holographic will. In her dissent, Judge Hart strongly urges that this is inappropriate due to important differences between IRAs and life insurance policies. 

The standard required to validate life insurance beneficiary changes by will seems relatively easy to satisfy: 1) specifically identify the account and 2) ensure that the testator's intent to change the beneficiary is clear.  Allowing testamentary changes to beneficiaries of non-probate assets can lead to many problems, including an increased risk of fraud and unnecessary litigation, which arguably defeats the purpose of non-probate assets. IRAs serve a different purpose than that of life insurance policies; therefore, the court's apparent willingness to directly extend the law applying to life insurance policies was in error. By comparing Arkansas's reasoning with that of other states as well as federal law, this note will show that if the courts wish to allow testamentary changes to IRAs and other non-probate assets, a much more coherent and strenuous test should be applied.  In order to encourage people to comply with company policies regarding beneficiary changes, testamentary disposition of non-probate assets should be the exception rather than the rule.

This note will begin by explaining the relevant reasoning in Estate of Grubbs.  Next, it will discuss the history and general agreement among other states with regard to the testamentary disposition of life insurance policy proceeds. Then, the history of Arkansas's unique approach will be  established, followed by a brief section comparing and contrasting Arkansas law with that of other states.  After that, this note will examine the inherent differences between life insurance policies and IRAs and will argue that such distinctions require IRAs to be treated differently than life insurance policies by not allowing testamentary changes to IRA beneficiaries.  Alternatively, if Arkansas courts choose to allow testamentary changes to IRA beneficiaries, this note will propose that courts should require such changes to meet a more rigorous standard than the current standard used to validate testamentary changes to life insurance beneficiaries. Finally, the note will conclude with a brief summary and restatement of the pertinent issue and arguments.

December 8, 2012 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Overly Attached Girlfriend Big Donor

Good GirlfriendProvided below is a link to a video from CNN about the Overly Attached Girlfriend. If you have not seen her videos, the Overly Attached Girlfriend is an internet meme about girl who is a little too attached to guy that she's infatuated with that obviously has no interest in her. The young woman who plays her, Laina (last name withheld), was shocked to discover how popular the videos she made portraying the Overly Attached Girlfriend have become. Since she created them, millions of people have seen her videos on Youtube that spoof popular pop songs. Laina changed the words to the songs so it appears as if the Overly Attached Girlfriend had written them. But Laina is more than just a pretty face with a crazy set of eyes, she is also big donor. Through her new found fame, Laina sought to raise money for charity and succeeded.

See 'Overly Attached Girlfriend' A Big Giver, CNN, Nov. 28, 2012.

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

December 8, 2012 in Current Events, Technology | Permalink | Comments (0) | TrackBack (0)

The Creation of Special Needs Trusts

TrustsIf a parent has a disabled child, that parent might want to consider creating a special needs trusts for their child. The primary reason that a parent might want to take this course of action is because of the expenses that a child is likely to incur from treatment for his or her disability. The costs of caring for a disabled child, even for wealthy families, can be burdensome and drain all of the assets that the family owns. It is important to note that many individuals who have disabilities require long-term care. For the vast majority of people, the costs of long-term care is paid by Medicaid or Social Security. That is why it is important to create a special needs trust. A person is only allowed to have about $2,000 in assets before they are disqualified from taking any of these benefits. The trust will allow a family to supplement the costs of caring for their disabled love one without disqualifying their disabled family member from Social Security or Medicaid. For the parents who are creating the trust, they might want to consider writing a letter to the trustee of the special needs trust. The letter should provide the considerations that the trustee needs to make when making decisions for their child.

The parents of the child can create a special needs trust at any time in that person's life. This might be the case if the disability is discovered later in life. A child with a disability might also be able to make a special needs trust should the person receive a windfall of some sort. The trust acts in much the way as if the parents of the child made the trust. The only difference is that the remainder of the trust gets paid to the government following the death of the child.  

See Tatiana Serafin, Creating Special Trusts For Challenged Kids, Barron's Penta, Dec. 1, 2012.

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

December 8, 2012 in Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, December 7, 2012

United States Supreme Court to Hear Two Same-Sex Marriage Cases

USSCAs reported in Bill Mears, Supreme Court takes up same-sex marriage, CNN, Dec. 7, 2012:

The Supreme Court will tackle the contentious issue of same-sex marriage, agreeing to hear two constitutional challenges to state and federal laws dealing with the recognition of gay and lesbian couples to legally wed.

In a one-page order on Friday, the court took on what will be one of the most important issues in its history. * * *

Oral arguments will likely be held in March with a ruling by late June.

One appeal to be heard involves the federal Defense of Marriage Act or DOMA, which denies federal benefits to same-sex couples legally married in their own state.

The second is a challenge to California's Proposition 8, a voter-approved referendum that took away the right of same sex-marriage that previously had been approved by the state's courts.

See also Jess Bravin, Supreme Court to Hear Gay-Marriage Cases, Wall St. J., Dec. 7, 2012 and Marcia Coyle, Supreme Court to Hear Historic Same-Sex Marriage Cases, The BLT, December 7, 2012.

December 7, 2012 in Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Petitions the Supreme Court is Watching

Unknown-6Please click here to view the petitions that the Supreme Court is watching for today's conference.  Cases include topics such as the federal antitrust laws, the Defense of Marriage Act (DOMA), and hot pursuit and warrant requirements, among others. The Supreme Court has announced that it will in fact review the constitutionality of DOMA and California's Proposition 8. 

See Petitions We're Watching, SCOTUSblog.com, 2012.  

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

December 7, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

90-year-old Iowa Judge Decides To Retire

Judge Ruth KlotzThe last remaining probate judge in Iowa, District Associate Probate Judge Ruth Klotz, is set to finally retire at the age of 90. Judge Klotz took the job at the age of 74, after a lifetime of helping people with their probate issues.

Judge Klotz began her legal career on the advice of her first husband, an attorney named Earl Fritz. In her last year of law school, she tragically lost her husband. At the time, Judge Klotz was pregnant with the couple's daughter. Without her husband to support her and their daughter, she realized that she needed to finish law school and begin working. She took the bar and began work the following Monday at the Iowa Department of Revenue. She later worked at the Dickerson Law Firm in Des Moines, Iowa where she discovered her love of probate matters. She would later use her new found expertise to manage trusts at Bankers Trust. She soon became the Polk County's "probate referee." She became a judge in 1996 and is still one to this day. She is well-respected among her peers and clearly well-liked. In fact, according to USA Today, "[s]tate lawmakers worked  a special exemption into the law that otherwise would have forced her to stop working at 80." Her approval rating was 96.9% before the last re-election among attorneys in a Iowa State Bar Association survey.

But from Judge Klotz's view, it is time to move on now. She does not know what she will be doing with all of her spare time now and even her daughter notes that leaving her position as a judge will probably be hard for her. The judge is looking at possibly traveling and volunteering. 

See Jeff Eckhoff, 90-Year-Old Iowa Judge Decides To Retire, USA Today, Dec. 4, 2012.

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

December 7, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Oceanside, California Insurance Agent Sentenced To Jail Time

Court FightAn insurance agent named Howard Jackson from Oceanside, California pleaded guilty to scamming clients out of $300,000 in a refinancing scheme. Jackson was sentenced to one year in jail and ordered to repay $399,099 to the people that he stole money from. Jackson persuaded his clients "to refinance their homes and invest the proceeds in life insurance policies and a company he was associated with." In his scheme, Jackson would then use the money that his clients invested to pay the first year of premiums on the policies that they purchased and then pocketed the remaining money. His scheme was finally uncovered in 2011 when one of his clients discovered that he had embezzled $80,000 in insurance premiums.

See Oceanside Man Sentenced For Scam: Howard Jackson Bilked Out of More Than $300K, ABC 10News, Dec. 5, 2012.

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

December 7, 2012 in Current Events, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

"Dead Ringer" -- New Thriller Based on Body-Snatcher Syndicates on Sale for the Holidays

Dead_RingerAmazon has chosen Dead Ringer for their Special Holiday Seasonal Promo and are selling it for just $1.99. See http://amzn.to/VxNnsz.

The following is from the press release for Dead Ringer by Allen Wyler:

While speaking at a Hong Kong medical conference, neurosurgeon Dr. Lucas McCrae slips the cloth off a cadaver’s head during a routine medical demonstration, and is overwhelmed by what’s staring back at him: The face of his best friend, Andy Baer.

Stunned, McCrae races back to Seattle to discover that Andy is in fact missing and may have been murdered by a gang of body snatchers who operate a legit funeral business and make a fortune by selling recovered body parts to medical researchers.

McCrae teams up with an unlikely pair—a beautiful but hardnosed female cop and a gang member whose family was victimized by the cadaver ring—to try and expose a macabre web of corruption that involves law enforcement, politicians, funeral home curators and murdered prostitutes.

Internationally renowned neurosurgeon Allen Wyler takes us deep into a nightmarish scenario, shockingly ripped from recent headlines, to deliver a horrifically plausible, page-turning thriller.

December 7, 2012 in Books - Fiction | Permalink | Comments (0) | TrackBack (0)