Wills, Trusts & Estates Prof Blog

Attorney Michael Santucci Helps Settle Bob Marley Trademark Infringement Case

As I have previously discussed, the trademark infringement case involving Bob Marley's name came to a close after the attorneys from both parties agreed to settle. The case was settled thanks to the assistance of an attorney from Fort Lauderdale, Florida by the name of Michael Santucci. Mr. Santucci represented Richard Booker, Bob Marley's brother, and several other parties, including the Bob Marley Movement of Jah People and the Bob Marley Heritage Foundation. The case was difficult because it involved several different aspects of intellectual property law and many different personal aspects that threatened the legacy of Marley and his family. Following the resolution of the case, Mr. Santucci stated that "'[f]rom what I learned about Bob Marley and his intentions, he would be happy with our recent achievements, especially the peace brought to the family.'" 

However, the good outcome from the Marley case should come as no surprise considering that Mr. Santucci has helped resolve other high profile cases in the past. Mr. Santucci was part of the team that litigated the All Pro Sports Camps, Inc. v. Walt Disney Company case in 2002. That case ended with a court granting a rather large verdict of $240 Million for his clients. More recently, Mr. Santucci finished settling a dispute between Ultra Music Festival and Ultra Records before he took on the Marley case. Reportedly, Mr. Santucci and the opposing counsel worked endlessly for 13.5 hours overnight to bring the case to a resolution. 

If you are interested in the specifics of Bob Marley Trademark Infringement case or any of his other activities, please visit Mr. Santucci's blog here. There are particular blogs that about the Marley case that a person can read about on his blog, including an article discussing his entrance into the case and an article discussing when both parties settled.

See Attorney Michael Santucci Helps Settle Bob Marley Family Dispute, PRWeb, Dec. 3, 2012; see also Bob Marley's Family Settles Fishy Trademark Suit, Mon!, TMZ, Dec. 2, 2012.

Annual Heckerling Institute on Estate Planning

The University of Miami School of Law will host an estate planning conference entitled, 47th Annual Heckerling Institute on Estate Planning at the Olrando World Center Marriot Resort and Convention Center in Orlando, Florida from January 14-18, 2013. Provided below is a description on the event:

The Heckerling Institute on Estate Planning is the nation's leading conference for estate planners, including attorneys, trust officers, accountants, insurance advisors, and wealth management professionals. The general session lectures and breakout sessions offer comprehensive coverage of the latest estate planning techniques and strategies, and special program tracks allow attendees to customize their educational experience. In addition to traditional estate planning topics, this year's Institute offers programs on the important related areas of elder law, marital law, and income tax planning. Attendees can also enjoy unparalleled networking and professional development opportunities that make attending the Heckerling Institute a valuable investment for every estate planning professional.

Article on Trusts in Belgium

Alain-Laurent Verbeke recently published his article entitled Trusts in Belgie: Liaisons Dangereuses (Trust in Belgium: Dangerous Liasons), Tijdschrift voor Privaatrecht (Private Law Journal) 2012, no.2, p. 693-704.  The abstract of the article available on SSRN is below: 

In this article I make a claim against off shore trusts and foundations as useful estate planning vehicles for Belgian residents. My point is that such structures may end up causing a nightmare both from the perspective of tax law and of civil law. 

On the fiscal side, the Belgian tax administration makes a strong argument for taxation both on the level of income tax and inheritance tax. Even fully discretionary and irrevocable trusts have a hard time to pass the tough tresholds. The administration has a point: how often is such fully discretionary trust really also in the facts fully discretionary with no power whatsoever for the settlor? 

This may change dramatically upon the decease of the settlor. At that moment the trust may become genuinely discretionary, in the hands of the trustees. Their fiduciary obligation is towards the goals and objectives set out in the trust deed and defined by the settlor. The latter however is not there anymore to correct or finetune. 

Hence, on the civil law side, the paradox of the discretion may turn into a true nightmare after the settlor has passed away. In many instances trustees may then rely on the discretionary character and the will of the late settlor to pretty much act as they seem fit. The heirs of the settlor are then at the mercy of the trustees goodwill.

Surviving Twin Sister Plans to Marry the Man Convicted of Killing Her Sister

Victor Cingolani is serving a 13-year sentence for murdering girlfriend Johana Casa in August 2010, but he insists that he is innocent, and Johana's twin sister plans to marry him on Friday in his prison in Santa Cruz province.  

The mother of the twins has vowed to do everything she can to prevent Edith, the surviving twin, from marrying Cingolani.  The mother wants to have her examined by a psychiatrist because she believes she does not know what she is doing.  Edith maintains that she is fully aware of what she is doing, continues to insist on Cingolani's innocence and accuses her mother of abandoning her and her sister.  

See Agence France Presse, An Argentine Woman is Planning To Marry the Convicted Killer of Her Twin Sister, Business Insider, Dec. 20, 2012. 

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

Reminder: CLE on Estate Planning 101

The ABA Section of Real Property, Trust & Estate Law and ABA Standing Committee on Paralegals will host a 60 minute session entitled, Estate Planning 101: The Basics on January 9, 2013. The session will be led by two members of the Real Property, Trust & Estate Law, Hugh Drake (Brown, Hay & Stephens LLP) and Tye Klooster (Katten, Muchin Rosenman LLP). The session include discussions of the following:

1. Defining the need and objectives for clients.
2. Determining intestacy.
3. Wills and revocable trusts.
4. Steps of probate and probate avoidance.
5. Taxes and asset protection.

Happy First Day of Winter

Good Morning,

Happy First Day of Winter!

Gerry

Holiday Parties and Networking

Holiday parties are in full swing, and these events give lawyers opportunities to engage in professional networking as they are enjoying the festivities.  

Above The Law featured an article entitled Moonlighting: How Not to Network, full of tips on what you should avoid at holiday parties.  The bottom line seems to be that indulging too much can backfire and it is best to be prepared, courteous and to follow up with new contacts after an event. 

See Jillian Snell, Holiday Parties and Networking Faux Pas, Wealth Strategies Journal 2.0, Dec. 20, 2012. 

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

CLE on Planning, Drafting and Administration

Minnesota CLE is hosting a Live Seminar entitled, 2013: An Estate Planning Odyssey: Critical Issues In Planning, Drafting and Administration on Friday, January 4, 2013 from 9:00 am - 4:30 pm in Minneapolis, Minnesota. The keynote address will be given by Ronald D. Aucutt. Attorneys who cannot make it to the live seminar can also view the Mr. Aucutt's keynote address through webcast. Provided below is a description of the event:

• Ron Aucutt’s coverage of what happens in the 2012 election; tax reform in general; estate, gift and GST taxes and any last-minute developments
• The latest on changes to the Minnesota estate tax – the calculator; the intersect with federal estate and gift tax law changes and the status of “qualified” property
• Small Estates Panel – drafting ideas for equalizing gifts; planning to minimize claims under recovery statutes; using trusts to protect M.A. interests; inter vivos gifts to reduce Minnesota estate tax and disclaimers for federal estate taxes
• Large Estates Panel – predicable ramifications of inaction or action by Congress; the perils of independent trustees and trust protectors; drafting tips including guiding language for trustees, avoiding the Delaware tax trap, decanting provisions and disclaimers
• Income tax issues for trusts and estates – pitfalls and opportunities of higher rates on ordinary income; capital gains rate increases; the new tax on investment income for individuals and trusts and thoughts on investment allocation to minimize the impact of the new tax
• And much, much more!

Limit Charitable Deductions

One option for reforming the IRC is to limit the amount of charitable deductions that a taxpayer may take in a given year. However, some people argue that if Congress were to limit the number of charitable of deductions, it should only be for charitable deductions made under the federal estate and gift tax. If Congress were to take this particular route, they could meet both of their primary goals. This move would increase revenue while ensuring that Congress could still provide an incentive for people to make charitable contributions.

In addition, a limitation on the amount of charitable deductions that a person could make under the estate and gift tax code would only affect the largest estates. Under a plan like this one, Congress could limit the amount by creating a deduction with a particular amount cap. For example, Congress could create a law that states that "the first $10 Million of charitable bequests could by fully deductible for estate tax purposes and only the amount gifted over that threshold would be deductible in part." Congress could also choose to create a progressive charitable tax deduction, where the amount that taxpayer can take as a deduction decreases as the amount that taxpayer donated increases. All of these propositions could be implemented while keeping Congress' primary goals for tax reform in mind.

See Edward Zelinsky, Limit the Estate Tax Charitable Deduction, OUPblog, Dec. 19, 2012.

Short Sale of Firearms Stocks

In the awake of the tragedy that unfolded in Newtown, Connecticut, a national debate has resurfaced about gun control laws in this country. These talks have placed the firearms industry directly in the regulatory cross-hairs of lawmakers in this country, which could have an effect on the price of stocks from these companies. The private sector is already experiencing these effects. According to The Trust Advisor, "Smith & Wesson has lost 28% of its market capitalization since Friday's tragic events. Sturm Ruger is down 16%." This situation is likely to get worse before it gets better, considering that both "New York and California city and state pension funds [are] 'aggressively' dumping their firearms holdings." 

At this time, it is more critical for advisors to begin asking questions about whether their clients have invested in gun stocks. The good news here that any present clients are probably not at risk because of their limited exposure to the companies that are experiencing the greatest effects. Both Smith and Sturm Ruger only account for 0.1% of the entire holdings "in [most] typical small-cap equity index fund[s]." An advisor probably needs to be more concerned if their client has primarily invested with these companies or is part of the Bushmaster Rifle equity fund. Regardless, it is probably still a good idea for an advisor to tell his or her clients about the risks associated with their investment plans. 

See Scott Martin, Short Sale: Is It Time To Suggest Dumping Your Clients' Firearms Stocks?, The Trust Advisor, Dec. 18, 2012.

Special thanks to Scott Martin (Contributor, The Trust Advisor) for bringing this article to my attention.

Kinkade Estate Settlement

As I have previously discussed, a court set a hearing date to determine who owns Thomas Kinkade's possessions that were located in his Monte Sereno mansion at the time of his death. I have also discussed how his wife, Nanette Kinkade, and his girlfriend, Amy Pinto-Walsh, have been engaged in a dispute over his estate. Now it appears that the lawyers for both parties have reached a settlement agreement. Pinto-Walsh has agreed to a settle in return for her silence. While we know that the parties' lawyers have reached an agreement, there is no word on the terms of the settlement. The parties' lawyers also did not comment on the legitimacy of the two holographic that Kinkade allegedly wrote or any of the other issues that the hearing was suppose to cover. The parties' lawyers only issued the following statement:

"Putting Mr. Kinkade's message of love, spirituality, and optimism at the forefront, the parties are pleased that they have honored Mr. Kinkade by resolving their differences amicably."

See Julie Prodis Sulek, Secret Deal Ends Girlfriend-Wife Feud Over Painter Thomas Kinkade's Estate, Contra Costa Times, Dec. 19, 2012. 

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

Article about Uniform Premarital and Marital Agreement Act

J. Thomas Oldham recently published his article entitled World Enactment of the Uniform Premarital and Marital Agreement Act in All Fifty States Change U.S. Law Regarding Premarital Agreements?, Family Law Quarterly, Vol. 46, No. 3 (2012).  The abstract available on SSRN is below: 

This article summarizes the provisions of the Uniform Premarital and Marital Agreement Act, which was promulgated by the Uniform Law Commission in the summer of 2012. It compares these provisions to the Uniform Premarital Agreement Act, the rules currently applicable in states that did not adopt the UPAA, and the approach applied in other countries to premarital agreements contemplating divorce. The article summarizes the new requirement in the UPMAA that, to be enforceable, each party must have had “access to independent counsel,” and discusses how courts might construe such a provision.

Trustee Should Follow Settlor's Instructions Unless Court Declares Settlor Incompetent To Revoke

When an individual or couple, as settlors, establish a revocable living trust, they are usually the initial trustees and beneficiaries. If someone other than the settlor is trustee while the settlor is alive, does this take away the complete control that the settlors have when they are the sole trustees? No, so long as the settlor has the power to revoke the trust, the trustee may obey the settlor.  

If at any point, it is determined that the settlor is incompetent to revoke the trust, then the trustee may no longer follow the settlor's instructions.  Does the trustee make this determination? As of now, no, the court does.  In Estate of Giraldin, the California Court of Appeals held that the trustee owed no duty to the settlor to inquire whether or not the settlor was competent because determining mental capacity is too complex and uncertain of an inquiry to require of the trustee. This case is on appeal with the California Supreme Court and a decision is expected next year. 

See Dennis Fordham, Estate Planning: May a Trustee Follow a Living Settlor's Bad Instructions?, Lake County News, Dec. 15, 2012. 

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

Chinese Businesswoman's Fortune Given Outright or In Trust?

Nina Wang Kung Yu-sum is a Chinese businesswoman who passed away in 2007 at the age of 69. Last year, the Court of Final Appeal recognized a 2002 will leaving Wang's money to the charity and declared another 2006 will to be a forgery.  Now hearings continue to determine whether that money was meant to be an outright gift or left in trust.  Wang was thought to be Asia's richest woman and her estate is valued at HK$83 billion.

Frank Hinks QC is a lawyer from the Chinachem Charitable Foundation who recently appeared before the Court of First Instance to argue that Wang intended to give her fortune to Chinachem Charitable Foundation absolutely as opposed to on trust.  He said that there was no evidence that she even knew what a trust was and trust is an alien concept to a Chinese businesswoman.

The secretary of justice argues against Hinks, proposing that Wang left the money to the foundation to hold as trustee to carry out Wang's wishes.  The hearing will continue before Mr Justice Jeremy Poon Shiu-chor.  

See Joyce Man, Trust Fund 'alien concept' For Nina Wang, Says Chinachem Foundation Lawyer, South China Morning Post, Dec. 19, 2012.  

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

The Scope of An Attorney-In-Fact

There are only a few courts that have discussed whether an attorney-in-fact may act based upon “the authority granted in the power of attorney.” In one of the more recent cases, the Georgia Court of Appeals decided a case that dealt with “whether an attorney-in-fact can perform an act that the principal refused to perform.”

In this case, Dennison Williams and Darius Peterson jointly owned real property. Williams executed a power of attorney appointing Peterson’s wife Anita. In the power of attorney, “Williams authorized Anita to sell real property.” The issue arose when Williams tried to sell his interest in the jointly owned property to man named Eugene Harris. In an effort to prevent him from selling, Anita presented Williams with a quitclaim deed that would transfer his interest to Peterson. He refused to sign the quitclaim so Anita signed the deed for him, claiming that she could as his attorney-in-fact. She filed the signed deed in the superior court. Williams would later do the same, except he transferred his interest to Harris. Peterson brought suit against Harris, claiming trespass and damage to property. According to Bryan Cave Fiduciary Litigation, “Harris filed a third-party complaint against Anita and Williams claiming fraud.” Anita moved for summary judgment on the grounds that she acted within her authority as the power of attorney.

While the trial court agreed with Anita, the Georgia Court of Appeals disagreed. In Harris v. Peterson, the court ruled that Anita had exceeded the scope of her authority as his power of attorney.  The court relied on two different theories. First, the court stated that a factual issue still exists in this case because of the legal theory of agency. While it is understood that an agent may act on behalf of a principal, the grantor of the power of attorney still has the authority to act. The question remains whether Williams granted Anita the authority to act in this instant. This determination should be based on Williams’ intent in light of the circumstances. The second theory is based upon ethics. The court stated that under agency law, an agent cannot self-deal. This is what Anita did when she transferred the property to her husband. The court transferred the case to the trial court.

See Luke Lantta, How Far Does The Scope of An Attorney-In-Fact’s Authority Extend?, BryanCaveFiduciaryLitigation.com, Dec. 18, 2012.

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

Article on 2012: Year In Review

Robert L. Moshman (Attorney, New York and New Jersey) recently published his article entitled, A Year In Review - 2012,The Estate Analyst (Dec. 2012). This article can aptly be described by the author's own comment: "The good news: There was no Mayan apocalypse. The bad news: You didn't win the Powerball." Provided below is the introduction to the article.

Regrettably, you did not win the $587.5 million Powerball lottery. And, although you survived the Mayan apocalypse, this is no time to relax. We have segued right over the “fiscal cliff” and into the new economic reality zone. In fact, with so many dangerous-sounding analogies, we may soon find ourselves betweenthe devil and the deep blue sea. Let’s regroup with a look back at the highlights of 2012, including Supreme Court rulings, Tax Court cases, celebrity estates, and a variety of items gleaned from another eclectic year.

New IRS Regulation On Attorneys Receiving Credit Card Payments

A new regulation from the IRS is set to go into effect on January 1, 2013. The new regulation will affect attorneys that accept debit and credit cards for payment from clients. Under Section 6050W, credit card companies must verify and match an attorney’s federal tax ID number and legal name on the attorney’s merchant account to the attorney’s information on his or her IRS record. Under the regulation, “an EXACT match is required.” This could become a problem if an attorney chooses to abbreviate his name on his merchant account. If this is the case, an attorney might want to consider contacting his credit card processor to change the name on his account to the legal name that appears on his tax return.

See Mark Mathewson, Accept Credit Card Payments? Beware This New IRS Reg, Illinois L@wyer Now, Dec. 11, 2012.

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

Rich Face Dilemma As Year Comes To An End

Even though the estate tax has been in a flux for the past decade, only the most recent uncertainty about the estate tax has forced the wealthiest individuals to face a difficult dilemma. Should they make a gift to take advantage of the lifetime gift tax exemption or should they hold on to their assets? Either choice has a its own benefits and disadvantages.

The benefits for making a lifetime gift are obvious. This is an excellent opportunity to make transfers of wealth to another person without incurring a tax on the transfer. For example, a person could wait to bequeath money to their favorite relative through their will, but it will likely incur a tax on the transfer of wealth because of the gift tax. If a person chooses to make that transfer before they die and utilize the lifetime gift tax exemption, the only money that the person loses is the money made in the transfer. The disadvantage here is a little less known. If the transferee decides that he or she wants to sell the asset, then the transferee will incur a tax on both the value of the transferred asset in addition to a tax on the assets appreciated value. If transferor bequeaths the asset, then the transferee will only incur a tax on the appreciated value of the asset from the time of the transfer. 

See Roberton Williams, Give Now Or Pay Later: Rich Face Dilemma With Fate Of Estate And Gift Taxes Up In Air, Forbes, Dec. 17, 2012.

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

Article on Wills, Trusts, and Estates

J. William Gray, Jr. (Partner, Hunton & Williams LLP, Richmond) and Katherine E. Ramsey (Partner, Hunton & Williams LLP, Richmond) recently published their article entitled, Wills, Trusts, and Estates, 47 U. Rich. L. Rev. 343 (2012).  The introduction from the article is available below: 

The 2012 session of the Virginia General Assembly enacted wills, trusts, and estates legislation that (i) clarified the fiduciary responsibilities of a directed trustee, (ii) authorized individuals to create trusts for their own benefit and protect the trust assets from their creditors, (iii) permits the trustee of a grantor trust to pay the grantor's income tax without causing the trust assets to be included in the grantor's gross estate for federal estate tax purposes, (iv) allows a trustee to exercise a distribution power in favor of a beneficiary by adding the trust assets to another trust for the beneficiary's benefit, and (v) allows an out-of-state executor or testamentary trustee to deal with the decedent's Virginia real property without an ancillary administrator. In addition, Virginia's statutes relating to wills, trusts, estates, and fiduciaries were recodified, effective October 1, 2012. Eight other legislative enactments and six opinions of the Supreme Court of Virginia during the twelve months ended June 1, 2012, rounded out a busy year in this field.

Brooke Astor's Son Tries To Get Out Of Prison Sentence

Brooke Astor's son appeared before the appeals court on Thursday to argue that he didn't deserve to be behind bars.  

In 2009, Anthony Marshall was convicted of taking advantage of his mother's dementia and plundering $200 million from his mother's fortune. Marshall, 88, paid back $12 million, and suffered a ministoke during his trial. His lawyer doesn't think it makes sense to send Marshall to prison to die after he paid back the money.  On the other side, prosecutors believe that Marshall should serve his sentence to signal that the state will stand up for the mentally fragile.  A ruling on this matter is expected next year. 

See Stephen Rex Brown, Brooke Astor's Son Begs For Break, Daily News, Dec. 13, 2012. 

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