Wills, Trusts & Estates Prof Blog

Is the Kansas Sperm Donor Case A Lesson Against Do-It-Yourself Artificial Insemination

As I have previously discussed, the State of Kansas claims that William Marotta should have to provide financial aid to a child that was conceived from the sperm that he donated to a lesbian couple. The state agency that deals with child support claimed that the contract Marrotta signed with the couple was not valid, which would have relieved of his duty to provide for the child, because the sperm donation and insemination were not performed by a licensed physician.

Some would argue that the problem for Marotta was largely self-inflicted, in that he is paying for his decision and the couple's decision to ignore Kansas law. Others would argue that the situation Marotta has found himself in is likely the product of financial considerations. The costs of following the proper procedure of self-insemination is expensive and many women choose to avoid doctors. Artifical Reproductive Technology (ART) can cost on average between $2,000 and $3,000, and is not covered by most health insurance providers. This means people seeking ART are looking for alternatives, such home insemination kits, that are much cheaper than the official option. The law here does not help either. Marotta and his attorney believe the law is most likely the product of a conservative state that is trying to maintain the traditional family by reducing the number of  the options that others have to become a parent in an alternative family.

Still, it is important to remember that do-it-yourself (DIY) options often result in these types of problems, regardless of whether it is a DIY will or trust or now DIY ART. According to MySA.com, "Corey Whelan, who runs workshops for lesbian couples interested in having children...said avoiding professionals is 'a buyer-beware proposition.'"

See John Hanna, Kan. Case Highlights Legal Issues For Sperm Donors, Nation/World, MySanAntonio, Jan. 4, 2013.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

Kansas Precedent on Sperm Donor Case

As I have previously discussed, William Marotta donated sperm to a lesbian couple so that they could have a baby of their own. He also signed a contract with the two to ensure that he would be relieved of providing financially for the child. When of one of partners, Jennifer Schreiner, had financial difficulties caring for the child, she applied for welfare. The State of Kansas refused, arguing that the biological father should care for the child. Marotta contested those claims arguing that he signed a contract stating that he would not have to care for the child. The state agency that deals with child support claimed that the contract was not valid because the sperm donation and insemination were not performed by a licensed physician, pursuant to state law. 

There was a particular case that was decided in Kansas in 2007 that might provide some insight to the case. In that case, the Supreme Court of Kansas denied a sperm donor parental rights because there was no contractual arrangement between the donor and the mother granting him those rights. Marotta's attorney, Ben Swinnen, argued that this case could provide a defense because it appears that the court's past ruling runs contrary to the assertions the Department for Children and Families. Without a contract granting rights to Marotta, his attorney has argued that Marotta did not have parental rights or the financial obligations that would stem from those rights.

See Kevin Murphy, Child Support Claim Rankles Sperm Donor To Lesbian Couple, Yahoo!News, Jan. 2, 2013.

Special thanks to Jim Hartnett, Jr. (Partner, The Hartnett Law Firm) and Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

eLearning Program for Paralegals

The ABA Section on Real Property, Trust & Estate Law is now launching a professional development series focused on paralegals, legal assistants, and others working in the areas of Trust & Estate law. 

The 2013 program will offer ten 60-minute eLearning sessions and attendees can register for the entire series or individual sessions.  

For more information and to register, please click here. 

Texas Tech Law Student to Compete at the Miss America Pageant

DaNae Couch, a third-year student at Texas Tech University School of Law and a member of The Estate Planning and Community Property Law Journal, is headed to the 2013 Miss America Pageant.  She won the Miss Texas title in July and will compete in the Miss America Pageant in Las Vegas on January 12. 

Danae is a 24-year old from Coppell and she is one of 53 contestants competing for the Miss America crown. She plans to graduate from Texas Tech School of Law in May 2014.  

See Brittany Hoover, Miss America Pageant to Have West Texas Flavor, Lubbock Avalanche-Journal, Jan. 3, 2012. 

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

Wills, Trusts & Estates Prof Blog wins "fan favorite" in ABA Journal Blawg 100’s Niche category

I was honored and humbled to learn earlier today that this blog was voted as the "fan favorite" in the ABA Journal's Blawg 100's Niche category.

I appreciate tremendously the support of my loyal readers, contributors, and assistants.

Thank you!!!!

 

President Obama used autopen to sign fiscal cliff legislation

In an unusual move, President Obama used an autopen to sign the fiscal cliff legislation.  Thus, he could technically claim in the future that he never actually signed the legisation.

Below is an excerpt from Dave Boyer, Republicans question Obama’s use of autopen to sign ‘cliff’ bill, The Washington Times, Jan. 3, 2013:

Terry Turnipseed, a law professor at Syracuse University who has written about the legality of the autopen, said it sets a bad precedent.

“I’m very, very surprised that this is now the third time that President Obama has done this, especially given that it was the Bush OLC that produced the memo and Bush himself refused to take advantage of the autopen,” he said. “Even Bush did not think that this was something that should have been utilized on a constitutional basis.”

Mr. Turnipseed said it’s not the use of the autopen that’s unconstitutional per se, but the fact that the president is not in the presence of the device when it’s being used. He said it should only be used in the rare case of a president being incapacitated, similar to the signing of a will by a person who is physically unable to do so.

For more information on autopen signing, see Prof. Turnipseed's articles in Slate here and his law review article here.

Court Rulings on the Kansas Sperm Donor Case

As I have previously discussed, William Marotta donated sperm to a lesbian couple so that they could have a baby of their own. He also signed a contract with the two to ensure that he would be relieved of providing financially for the child. When of one of partners, Jennifer Schreiner, had financial difficulties caring for the child, she applied for welfare. The State of Kansas refused, arguing that the biological father should care for the child. Marotta contested those claims arguing that he signed a contract stating that he would not have to care for the child. The state agency that deals with child support claimed that the contract was not valid because the sperm donation and insemination were not performed by a licensed physician, pursuant to state law. 

Courts across the country have somewhat already grappled with this issue. Typically, courts have held that where a man donates sperm and maintains a relationship with the child, he can be required to financially support the child through child support. In many of the cases, the sperm donor often sent aid to the mother and child and would sometimes be referred to as a "dad" or "papa". Recently, the State of Texas held that a police officer did not have to pay child support for a child he conceived with a woman he formerly knew by donating sperm to her. By the time that the suit was filed, the officer had already moved on with his life. In fact, the suit came as a bit of a shock to him. Whether this trend among the states will help Marotta remains to be seen.

See Isolde Raftery, Kansas Demands That Sperm Donor Pay Child Support, NBC News, Dec. 31, 2012.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention. 

Speaker John Boehner Increases His Support of the Defense of Marriage Act

As I have previously discussed, the Defense of Marriage Act (DOMA) is currently under constitutional attack by Edith Windsor on the grounds that the law violates the equal protection clause of the 14th Amendment to the United States Constitution. The case is  Windsor v. United States. The Obama Administration has chosen to not defend the law, and so the Bipartisan Legal Advisory Group (BLAG), a group composed of the leaders in the House of Representatives, has decided to defend the law.

On January 3, 2013, Speaker Boehner announced that the Opening Day Rules package would contain language that would allow the continued use of taxpayer funds to defend cases like Windsor and state that BLAG would continue to speak for the House on legal matters. Democrats within the House have stated repeatedly that BLAG does not support their position and does not speak for all members of the House. On the other hand, Michael Steele, spokesperson for the Speaker stated that this is an important check on the President, who would be able to otherwise reject a law unilaterally by choosing to not defend it against a legal challenge.  As I have previously discussed, the Supreme Court is set to hear whether BLAG has legal standing to defend DOMA.

See Ariane de Vogue, Boehner Bolsters Support of Defense of Marriage Act, ABC News, Jan. 3, 2013.

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

Non-Tax Estate Planning Considerations

In order to optimize an estate plan, one should consider the following non-tax considerations: 

1. Plan For the Possibility of Estate Tax: Don't ignore the tax laws completely and it might be wise to insulate assets from future estate taxation by allocating some of the deceased spouse's assets to a separate trust that is covered by the deceased spouse's exemption amount.

2. Reassess Existing Life Insurance Policies: One should review his or her life insurance policy regularly to ensure the policy will remain in effect through the insured's death and is performing competitively with currently available insurance products. 

3. Incorporate Asset Protection Planning into Estate Plans: It is wise to structure a child's inheritance in a way that protects the assets from unforeseen circumstances. 

4. Plan For The Disposition of Family Businesses: A business owner's estate plan should address the future ownership, voting control, and management of the family business. 

5. Clearly Identify Estate Beneficiaries: Avoid inadequate or incorrect identification of a beneficiary that could give rise to litigation. 

6. Fund And Periodically Review Revocable Trusts During Lifetime: A periodic review of revocable trusts ensures that assets remain in the name of the revocable trust. 

7. Review Beneficiary Designations For Life Insurance Policies, IRAs, Retirement Plans, And Annuities: The beneficiary designation, not the will, controls these policies, so it is important to pay close attention to who is designated.  And if it is a child who is designated, then an expense trust or a custodial arrangement should be made if that child is a minor.  Otherwise, the assets are held by a court-appointed guardian until the child turns 18 and the court can distribute the assets outright to the child. 

8. Use Durable Powers of Attorney and Health Care Powers Of Attorney To Plan For Incapacity: These documents should designate an alternate agent in addition to an agent. 

9. Generally, Avoid Joint Tenancy in Assets or "Transfer On Death" Accounts: Such accounts frequently produce results at odds with an individual's estate plan and can lead to litigation, so it is best to deal with these assets through a well-drafted will or trust. 

10. Provide For Flexibility In Trust Arrangements:  Provisions can be made for the naming of future, currently unidentified, beneficiaries and removal and replacement of an ineffective trustee. 

See Stuart B. Dorsett, Top 10 'Non-Tax' Estate Planning Recommendations, WRAL Tech Wire, Jan. 2, 2013. 

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

Three New Year's Resolutions for Your Estate Plan

It is the time of year where we are all making resolutions and re-committing to improvements.  There are three things you can do as 2013 kicks off to stay on top of your estate plan.

1. Review your beneficiary designations: While the terms of your will control the distribution of your probate property, beneficiary designations control who inherits your non-probate assets. To review these designations, identify your non-probate assets and the beneficiaries you have designated to that asset.  If you have married, divorced, or had children, you may want to change your beneficiary designations.  If those current designations leave your assets to a minor or an individual with special needs, you should hold that asset in a trust for that person's benefit. 

2. Plan for the disposition of your digital assets: If you do not plan for the disposition of digital assets, your loved ones may have trouble accessing financial accounts or lose family memories.  You can start by making an inventory of your digital assets, and write down the passwords associated with each asset.  Then put that inventory in a safe location and share that location with loved ones. 

3. Contact your estate planning attorney to schedule a review of your estate plan: It is a good idea to review your estate plan every few years.  This is particularly important if you have recently experienced a significant change in circumstances. 

See Anna R. Valkovich, PLLC, 3 Estate Planning New Year's Resolutions, Dec. 31, 2012. 

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

Fiscal Cliff Estate and Gift Tax Changes

As I have previously discussed, there were several changes to the estate and gift tax laws. Here is summary of all of the changes:

• The fiscal cliff bill does not alter the current the lifetime gift and estate tax exclusion amount of $5.12 million, but it the tax on inherited income exceeding the exclusion has increased from 35% to 40%. 
• The bill also does not affect the marital deduction.
• The portability law that was passed in 2010 was made permanent by the fiscal cliff bill; however, portability is still not automatic. A person looking to obtain their spouse's unused exclusion must still follow the proper procedure. According to Forbes, "The executor handling the estate of the spouse who died will need to transfer the unused exclusion to the survivor...[t]he prerequisite is filing an estate tax return when the first spouse dies, even if no tax is owed." There is a 9 month period in which the executor must fie the estate tax return. A 6 month extension is allowed. If the executor fails to meet this deadline, then the spouse will lose his or her right to portability.
• It is important to remember that not all gifts apply to the lifetime exclusion. For example, a taxpayer may give upwards of $14,000 under the annual gift tax exclusion. Spouses can double this amount to give upwards of $28,000 to as many people as they want without affecting the lifetime gift and estate tax exclusion.

See Deborah L. Jacobs, The Fiscal Cliff Deal: Estate and Gift Tax Explained, Forbes, Jan. 2, 2013.

Fiscal Cliff Bill Creates Tax Break For Donations to Charity

As I have previously discussed, Congress averted going over the fiscal cliff with a last minute resolution. The fiscal cliff bill also reactivates an old special tax break for senior citizens over the age of 70.5 who choose donate up to $100,000 to a charity from their IRAs. The way that this tax break usually works is that the owner of an IRA appoints a custodian to take a sum of money from their IRA to donate to a charity. 

However, if a person would like to take advantage of this opportunity for 2012, he or she must do so quickly because the Congress only extended the deadline to January 2013. This tax break is even more limited by the fact that this only applies owners of IRAs who have postponed taking their IRA distribution until December. If that IRA owner makes the donation before the end of January 2013, then the amount that they donated will count towards their 2012 minimum required distribution. To make the donation, IRA owners should still follow the procedure of appointing a custodian to make the donation. While a donor cannot take a deduction for this contribution, he or she does not have to include the amount that was donated to the charity in their adjusted gross income.

See Deborah L. Jacobs, Fiscal Cliff Deal Allows Giving IRA Assets To Charity, Forbes, Jan. 1, 2013.

Marotta Claims Child Support Claim Is Politically Motivated

As I have previously discussed, William Marotta donated sperm to a lesbian couple, and he signed a contract with the couple excluding him from future financial responsibilities for the child. When the couple fell on difficult financial times they applied for welfare to help take care of the 3-year-old child. The state agency that handles that matter argued that Marotta should have pay for child support and the contract he signed was invalid because the couple and him failed to follow the proper procedure for donating sperm.

Now, Marotta has acknowledged that the case does scare him because of the financial implications of litigating the case. Though the attorneys that took his case are charging him reduced rates, Marotta does not have much more money to send on the case. In fact, he is sure that he will soon not have the funds to pay for his legal fees. Marotta is upset with decision to release his name but only at the state for forcing Schreiner to surrender his name. He claims that the decision to pursue him is politically motivated given that the case involves several key issues, including same-sex rights, adoption, and sperm donor rights. Marotta's claim is based on the fact that Kansas is a Republican state. He further argues that the policy adopted the state agency is harmful because it prevents men from deciding to become sperm donors at all. If a person wants to help Marotta in his defense, they can donate to his Legal Defense Fund here.

See Tim Hrenchir, Topeka Sperm Donor: Child Support Case Politically Motivated, The Capital-Journal, Dec. 31, 2012.

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

Fiscal Cliff Bill Passes Both the House and the Senate

As of January 1, 2013, the House of Representatives passed the bill that passed the Senate on New Year's Eve. The deal reached was a compromise from both Democrats and Republicans. President Obama is expected to sign the bill into law today on January 3, 2013.

The bill "makes permanent the Bush administration's tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000." For income that exceeds the new threshold, the tax rate will be 39.6%, which reflect the tax rates from the Clinton administration. Estimates conclude that the new tax rate will generate about $600 billion in new revenue. On the matter of the estate tax, the bill passed by the house and the senate will maintain the $5 million lifetime gift and estate tax exemption (indexed for inflation), but the rate on income that exceeds to the exemption has increased. The new estate tax rate is now 40% instead of 35%. In addition, the new bill will prevent Sword of Damocles that has swayed over this country's neck for the past year. The bill will delay the vast and automatic spending cuts that were set to activate if Congress did not come to an agreement on the fiscal cliff.

I have provided a link to the full text of the bill if you interested here. Readers can also find a complete summary of all of the fiscal cliff changes in the article from Mr. Ezra Klein.

See Matt Smith, House Staves Off Fiscal Cliff, But More Squabbles Lie Ahead, CNN Politics, Jan. 2, 2013; see also Ezra Klein, Wonkbook: Everything You Need To Know About The Fiscal Cliff Deal, The Washington Post, Jan. 1, 2013.

Special thanks to  Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) and Joel Dobris (Professor of Law, UC Davis School of Law) for bringing these articles to my attention.

Michigan Supreme Court Answers Certified Question: IVF Twins Cannot Inherit From Deceased Father

In In Re Certified Question (Mattison v Social Security Commissioner), the Michigan Supreme Court ruled that children born after the death of a parent who were not in gestation at the time the parent died may not inherit from that parent under Michigan intestacy law.  

The plaintiff and her husband began an in vitro fertilization program in October 2000. After the plaintiff's husband died unexpectedly in January 2001, she continued the program and gave birth to twins in October 2001.  After their birth, she applied for social security survivors' benefits.  The administrative law judge found that the twins were not entitled to those benefits under Michigan intestacy law.  The plaintiff then brought her case before the District Court for the Western District of Michigan, and the question was certified to the Michigan Supreme Court.  The Michigan Supreme Court agreed with the administrative law judge. 

Justice Young wrote a dissent that stated he would have declined to answer the certified question, noting that the Michigan Supreme Court may not issue advisory opinions.  He further commented that there was nothing unclear about the Michigan intestacy law and the District Court should have been able to determine this question. 

See Sarah Riley Howard, Twins Conceived With IVF After Father's Death Cannot Inherit From Him, Nor Collect SSI, JDSupra, Dec. 31, 2012. 

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

Potential Heir to Huguette Clark Fortune Recently Found Dead

I have previously blogged about disputes surrounding Huguette Clark's estate, and there has been a recent development regarding her heirs.  A homeless man who was a potential heir to Huguette Clark's $300 million fortune has been found dead in Wyoming.  Timothy Henry Gray, Clark's 60-year-old half great-nephew was found dead under a Union Pacific Railroad overpass.  Temperatures in Evanston, where Timothy was found dead, had hit a low of 0 in recent days, so he reportedly died of hypothermia.  

Gray's siblings said that their homeless brother disappeared in 1990 after their mother died.  If Gray does not have a will, his siblings could receive his $19 million share in addition to their own. 

See Cavan Sieczkowski, Homeless Heir To $300 Million Huguette Clark Fortune Found Dead, The Huffington Post, Dec. 31, 2012. 

Special thanks to Laura Galvan (attorney, San Antonio, Texas) for bringing this article to my attention.

Sperm Donor Must Pay Child Support

There is an old saying that states that "no good deed goes unpunished." Well, William Marotta is learning that lesson the hard way. The 43 year old Kansas man has been ordered by a Kansas court to pay child support for a child that he reared in a less than traditional manner. According to the Daily Dot, Marotta "thought he was doing a good deed three years ago when he donated his sperm to Angela Bauer and her partner Jennifer Schreiner." Marrotta apparently learned of the couple's desire to mother a baby together through the popular website Craigslist. The couple are currently foster and adoptive parents, but the couple wanted to actually get pregnant and have a child of their own. He responded to their ad, signed a contract with the couple, and donated his sperm. The contract that Marotta signed was suppose to waive his responsibility to provide future financial care to the conceived child. When Bauer could no longer work to support the children, Schreiner filed for welfare to benefit the now 3 year old child.

The Kansas Department of Children and Families determined that the baby's own biological father should pay child support, in lieu of the department paying welfare, and demanded to know the identity of the father. When Marotta contested that the department's claim based on the contract he signed, the department determined that the contract was not valid because the insemination of the donor sperm was not handled by a licensed physician, which is a requirement under Kansas law. Marotta is now challenging the ruling. His court date is scheduled for January 8, 2013.

See Kevin Morris, Man Forced To Pay Child Support After Donating Sperm on Craiglist, The Daily Dot, Jan. 1, 2013.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention. 

Book on Trusts From The Perspective of Beneficiaries and Trustees

Hartley Goldstone (Founder, Navigating the Trustscape) and Kathy Wiseman (Founder/President, Working Systems, Inc.) recently published a book entitled, Trustworthy: New Angles on Trusts From Beneficiaries and Trustees, (2012). Provided below is a description on the book from Amazon:

TrustWorthy is a collection of 25 personal -- and positive -- stories told by beneficiaries, trustees and their advisors. The book speaks to the human side of personal trusts, leaving the technical side (legal, tax, investments) to others.

The book's objective? To begin to transform the most complex, conflicted and difficult relationship known under the law -- the "arranged marriage" between beneficiary and trustee -- by supplanting prevailing negative assumptions and behaviors. Readers are given a peek at "what other families do."

Storytellers tackle big questions, for example:

• How can trusts be used to promote beneficiaries' maturity?
• What should I look for in a trustee?
• How can beneficiaries successfully integrate inheritances into their lives?
• How can trustees, prudently and within legal and other constraints, administer trusts in a way that enhances beneficiaries' lives?
• How can the widespread dissatisfaction, and all the talk of "problem" beneficiaries and "problem" trustees, give way to more creative and productive relationships?

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

Ojukwu's Codicil to His Will

As I have previously discussed, Ojukwu's will was read aloud and it disposition of property divided his family between the former leader's widow and his sons. Now a codicil has appeared and it has shed some light on the dispute. First, it appears that Ojukwu did in fact intend to give his widow the majority of his property. Furthermore, it also appears as that the widow was correct in her assertion that she owned the property before Ojukwu passed away. Ojukwu claimed that two of the properties were already transferred to her through a Deed of Gift as an inter vivos gift. His codicil also clarified that the Jubilee Hotel that was suppose to go to his daughter Tenni Hamman was already sold, although Ojukwu claimed that the will did compensate Tenni with a portion of his real estate holdings.

See Tony Edike, Between Ojukwu's Will and the Codicil, Vanguard, Dec. 30, 2012.

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

Happy New Year!

Happy New Year and Best Wishes for 2013!!!