Wills, Trusts & Estates Prof Blog

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

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Saturday, January 12, 2013

Kris Jenner Asks Kanye West to Take $10 Million Life Insurance Policy

Unknown-1Kris Jenner insists that Kanye West takes out a $10 million life insurance policy to secure the life of his child with Kim Kardashian.  Kris wants the rapper to name the couple's baby as the primary beneficiary and Kim as secondary beneficiary.  

Kanye agrees to get the policy and says he actually already looked into it before Kris even brough it up.  While Kanye is in perfect health, he travels a lot and not all of his tour spots are the safest locales.  

See Kris Jenner Wants Kanye West to Take $10 Million Life Policy, The Indian Express, Jan. 12, 2013. 

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

January 12, 2013 in Current Events | Permalink | Comments (3) | TrackBack (0)

Tax Filing Season Starts on January 30 Now

Images-2Since the American Taxpayer Relief Act passed on January 1, the IRS is delaying tax filing dates so they have time to implement the numerous substantial tax changes.  The IRS stated that tax filing for 120 million expected returns will commence on January 30.  IRS acting commissioner Steven Miller expects all of the computer changes will be made and tested by January 30 so they can process all those returns without major computer problems.  

See Patrick Temple-West, IRS Delays Start of Tax Filing Season to January 30, Reuters, Jan. 8, 2012

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

January 12, 2013 in Current Events | Permalink | Comments (1) | TrackBack (0)

Estate Battle Over Poisoned Lottery Winner's Estate

LotteryAs I have previously discussed, the wife of Urooj Khan, Shabana Ansari, supported that his body be exhumed after it was determined Khan was poisoned with cyanide. Apparently, Khan was already in an estate battle "with several of his siblings over control of his estate, including his lottery winnings." Khan died suddenly shortly after he tried to collect his lottery winnings. Now, his brother, Imtiaz, and his sister, Meraj Khan, have won an order from a probate judge to place a freeze on the lottery check so that Khan's widow cannot cash the check. The brother and sister's concern was that Khan's daughter from a previous marriage would not receive a portion of the estate. Ansari denied the accusation that she had removed assets from the estate.

See Jason Keyser, Document Show Battle Over Poinsoned Lottery Winner's Estate, NorthJersey.com, Jan. 9, 2013.

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

January 12, 2013 in Current Events, Estate Administration | Permalink | Comments (0) | TrackBack (0)

Belgian Monarchy Tarnished by Allegations Against Queen Fabiola

MoneyQueen Fabiola of Belgium "has been accused of avoiding death duties of 70 per cent by using a foundation to channel funds to her relatives." The country of Belgium has paid Queen Fabiola an annual public stipend since 1993, the year that her husband Kind Baudouin passed away. Unfortunately, this incident came at a difficult time considering the current financial state of most European countries. Like most European countries, Belgium has started to cut public spending and royalty within those European nations have been criticized for their lavish public spending. The Queen insisted that she was not placing publicly funded stipend within the foundation. She argued that fund "would only include her private money." She claimed that the only expenses that were covered by the stipend were housekeeping expenses, including salaries. 

See Bruno Waterfield, Belgian Monarchy Rocked By Queen Fabiola Tax Row, The Telegraph, Jan. 11, 2013.

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

January 12, 2013 in Current Events | Permalink | Comments (0) | TrackBack (0)

Friday, January 11, 2013

Article about the Attorney Client Privilege in Arkansas

UnknownMolly S. Magee recently published her comment entitled Who is the Client? Who Has the Privilege?: The Attorney Client Privilege in Trust Relationships in Arkansas, 65 Ark. L. Rev. 637 (2012).  The introduction to the comment is available below: 

A trustee often encounters complex issues administering a trust. The trustee is presumably retained because of expertise in a particular area or because of confidence the settlor has in the trustee. The role of an attorney for a trust is to assist the trustee in making decisions regarding the trust. The attorney discusses his professional opinions and various options for trust administration with the trustee. The trustee then makes decisions based on that information, coupled with personal experience. Fees are generally paid from the funds of the trust, which exist for the sole benefit of the beneficiaries.

Suppose that subsequent to actions taken by the trustee, the beneficiaries sue the trustee for decisions made relating to the trust. Then, in litigation, the beneficiaries seek to discover communications between the attorney and trustee. Can the attorney-client privilege in Arkansas protect those communications?
Jurisdictions are split on whether a trustee, when selecting and corresponding with an attorney for the trust, is representing himself or the beneficiaries, and therefore, whether the communications between an attorney and trustee are protected by the attorney-client privilege. The Uniform Trust Code has not declared whether a trustee may claim attorney-client privilege in these situations. As a result, when litigation ensues, it is difficult in many jurisdictions to determine if the attorney-client privilege protects the communications, and, if so, which communications will be protected.
Although courts in a majority of jurisdictions have adopted a “fiduciary exception” to the rule of attorney-client privilege, Arkansas courts have yet to rule on this issue. Over thirty years ago, the Arkansas Supreme Court held that, in some cases, the trustee and the beneficiaries fall under a “joint-clients” exception to the attorney-client privilege. However, since then, legislation in Arkansas has applied the principle of privity to define the relationship between the attorney, trustee, and beneficiaries, altering the analysis. Moreover, in jurisdictions around the country, there has been a trend toward moving away from the fiduciary exception to the minority rule, under which the attorney-client privilege protects communications between the attorney and trustee.
It is important that there is clear law in Arkansas on this issue because without predictability, the attorney-client privilege is ineffective. The attorney-client privilege is ineffective if the parties do not know in advance who is subject to its protection. Part II of this comment examines the three different approaches courts take concerning the application of the attorney-client privilege in litigation between trustees and beneficiaries. Part III discusses Arkansas law governing trust relationships and the attorney-client privilege. Part IV analyzes the various approaches as compared to current Arkansas law. Part V recommends that Arkansas follow the minority approach and protect communications between trustees and attorneys. Finally, this comment proposes a rule to create predictability and certainty for attorneys and their clients in these situations.

January 11, 2013 in Articles, Trusts | Permalink | Comments (0) | TrackBack (0)

Planning for Clients Who Own Horses

Images-1Clients who own a horse present special issues for attorneys, and it helps attorneys to connect with horse-owning clients to be aware of these issues.  Since a horse represents a major financial investment for clients who own one, maybe even their primary investment, planning for the horse is essential.  

The animal trust statutes for wills does not adequately provide for a horse's total care because it is only valid at the owner's death.  A traditional revocable living trust might be the best option to provide for the uninterrupted care of a horse.  Caring for a horse can be more complicated than caring for a dog or a cat and an equine trust allows the owner to create a detailed set of instructions to outline the aspects of the horse's care. 

One final unique aspect of an equine trust is that it is signed by the horse's guardian, so it creates a binding contract with the guardian.  The guardian must then follow the trust document and can only use his or her discretion when the trust authorizes it.   

See AJ Fudge, Planning for Horse-Owning Clients, Wealth Counsel Quarterly, January 2013.

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

January 11, 2013 in Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Wife of Lottery Winner Asks For His Body To Be Exhumed

LotteryUrooj Khan is both the luckiest and the unluckiest man in the world. One day he was cashing his lottery prize worth more than $400,000 and the next day he died of cyanide poisoning. Now, his wife has come forward supporting the exhuming of Khan's body to be examined by forensic analysis. His wife, speaking through her attorney, claimed that she had nothing to do with the death. She said that they all had the same meal together the night before he died and has no idea how he was poisoned. Among the people at Khan's last meal was his wife's father, who apparently owes $124,603 in tax liens to the IRS. The court will hold a hearing on whether they will exhume the body on January 11, 2013.

See Wife Supports Exhuming Lottery Winner's Body, Video, abc7chicago, Jan. 10, 2013.

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

January 11, 2013 in Current Events, Estate Administration | Permalink | Comments (1) | TrackBack (0)

Warner Bros. Emerges Victorious In The Fight For Superman

SupermanAs I have previously discussed, a federal district court granted Jerome Siegel, Superman co-creator, the right to recapture his Superman rights. Now, the Ninth Circuit Court of Appeals reversed the decision of the lower district court, on Warner Bros.' "contention that it had a deal in 2001 with the estate of Superman co-creator Jermone Seigel." The Laura Siegel Larson v. Warner Bros. Entertainment, Inc. case came after a federal judge ruled that Joseph Shuster did not have the right to recapture his portion of the Superman copyright. This comes as great news for Warner Bros., who basically has the license to exploit the Superman franchise, the heirs of the estate cannot prevent Warner Bros. from doing so. 

See Eric Gardner, Warner Bros. Win Blockbuster Victory in Legal Battle For Superman, The Hollywood Reporter, Jan. 10, 2013.

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

January 11, 2013 in Estate Administration | Permalink | Comments (1) | TrackBack (0)

No Recourse For Man Whose Ex-Wife Stole From his Retirement Account

RetirementMichael Foster of Tulsa, Oklahoma learned the hard way that it is important to maintain your retirement documents even amidst your own personal struggles. After 11 years of marriage, Foster and his wife divorced. Foster moved out of his house at some point in time and forgot to change his address. Afterwards, his former employer mailed him a letter with the printed type: "To be opened by addressee only." His ex-wife found the letter, which contained information that the owner of the retirement policy could now access funds online. Foster's ex-wife followed the procedure in the letter and drained Foster's entire account in about four months. According to Bankrate.com, "He lost $42,126.38 altogether - and didn't even find out about it until January of the following year, when he received a tax form from the plan provider reporting a distribution of that amount." 

When Foster tried to recover the money from his former company claiming potential fraud, the district court and the Tenth Circuit Court of Appeals agreed that the plan was not a fault and that the company did not have to insure against the wrongful actions of third parties. The court of appeals also stated that his employer did not have to compensate for his negligence and failure to update his address.

See Barbara Whelehan, Woman Drains Ex's Retirement Account, Retirement Blog, Dec. 7, 2012.

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

January 11, 2013 in New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Married Couple's Estate Planning Guide

IRSFor married couples, the passage of the fiscal cliff bill, also known as the American Taxpayer Relief Tax Act of 2012 (ATRA), brought good news. For one, both the portability provision and the marital deduction were made permanent by ATRA. Unfortunately for some, the provision only helps taxpayers that passed away after December 31, 2010 and does not apply to same-sex married couples or if the surviving spouse is not an United States citizen. What is important to remember about portability is that the process is not automatic. The executor that is managing the estate must transfer the unused portion of the decedent's lifetime gift and estate tax exemption to the surviving spouse. The executor must file "an estate tax return when the first spouse dies." A taxpayer must take into account several different aspects of the portability provision. First, the portable amount is not adjusted for inflation. Second, it does not apply to the exemption for GST taxes. Finally, the usefulness of the portability exemption does not replace the usefulness of a bypass trust.

An additional important aspect of portability occurs when the surviving spouse remarries. If a surviving spouse takes the exemption of their first spouse and remarries, they are not allowed to hold on to their first spouse's exemption if their second spouse passes away before them. The surviving spouse is only allowed to take the unused exemption of their second spouse.

See Deborah L. Jacobs, A Married Couple's Guide To Estate Planning, Forbes, Jan. 9, 2013.

January 11, 2013 in Estate Tax, Generation-Skipping Transfer Tax, Income Tax | Permalink | Comments (2) | TrackBack (0)