Wills, Trusts & Estates Prof Blog

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

Thursday, December 20, 2012

Kinkade Estate Settlement

ArtAs 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.

December 20, 2012 in Current Events, Estate Administration, Wills | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 19, 2012

Article about Uniform Premarital and Marital Agreement Act

ThomasOldhamJ. 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.

December 19, 2012 in Articles | Permalink | Comments (0) | TrackBack (0)

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

UnknownWhen 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.

December 19, 2012 in Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Chinese Businesswoman's Fortune Given Outright or In Trust?

Images-3Nina 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.

December 19, 2012 in Current Events, Trusts | Permalink | Comments (0) | TrackBack (0)

The Scope of An Attorney-In-Fact

Court FightThere 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.

December 19, 2012 in Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Article on 2012: Year In Review

DoomsdayRobert 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.

December 19, 2012 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

New IRS Regulation On Attorneys Receiving Credit Card Payments

IRS 2A 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.

December 19, 2012 in Current Affairs, Income Tax, Professional Responsibility | Permalink | Comments (2) | TrackBack (0)

Rich Face Dilemma As Year Comes To An End

Gift TaxEven 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.

December 19, 2012 in Current Affairs, Estate Tax, Gift Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 18, 2012

Article on Wills, Trusts, and Estates

Ramsey_katherine Gray_billJ. 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.

December 18, 2012 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

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

Images-5Brooke 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.

December 18, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)