Wills, Trusts & Estates Prof Blog

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

Sunday, September 24, 2017

Article on The Comments to the Uniform Voidable Transactions Act Relating to Self-Settled Spendthrift Trusts are Correct

17.03.InSideBACRIM.MoneyKenneth C. Kettering recently posted an Article entitled, The Comments to the Uniform Voidable Transactions Act Relating to Self-Settled Spendthrift Trusts are Correct, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

The comments to the Uniform Voidable Transactions Act (formerly named the Uniform Fraudulent Transfer Act), originally written in 1984, were refreshed in connection with the 2014 amendments. The comments make reference to the unanimous body of cases holding that a transfer by a debtor to a spendthrift trust for the debtor’s own benefit — i.e., an asset protection trust — is a fraudulent transfer. Vendors of asset protection trusts are seeking to suppress those comments. The arguments they advance for suppression of those comments have no merit at all.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 24, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, September 22, 2017

Article on Forced Heirship in Spanish Law

WillieSergio Cámara Lapuente recently posted an Article entitled, Forced Heirship in Spanish Law, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

Although the Spanish Civil Code is especially restrictive on the will of the deceased since it imposes the "post mortem" duty to protect the family by means of fixed shares called "legítimas", this system has been softened in the latest legal reforms, testamentary practices and a new, more flexible orientation of case law on the causes for disinheritance since 2014. Legal institutions such as the "mejora" ("improvement" of some of the forced heirs), the non-penalising nature for the testator on the rules on unfair disinheritance or intentional omission (preterition) or payment of the legítima in cash in some cases give the testator some margin for decision-making despite the high amount of the forced share (two thirds of the estate for the descendants). Nevertheless, the legal system is still held to be excessively restrictive in the eyes of society and the legal community alike. This has therefore brought about various different proposals for reform, ranging the keeping of the current system but with various reforms such as reducing the forced heirs and amounts, converting it into a post mortem maintenance right in the measure of the real needs of the relatives and spouse or the abolishment of the forced heir altogether. This paper examines the history of forced heirship in Spain and assess critically the law in force as for the beneficiaries, the calculation and protection measures, the usual techniques to override in practice and the arguments in favor of the preservation of the forced heirship or in favor of a greater freedom of testation, with account of the latest developments in case law and the recent 2017 proposals to reform the Law of Succession in this respect.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 22, 2017 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Wednesday, September 20, 2017

Article on Relaxed Formalism: The Validation of Flawed Wills

ElementsDoron Menashe Sr. recently posted an Article entitled, Relaxed Formalism: The Validation of Flawed Wills, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

Section 25 of the Succession Law, 19651 authorizes the courts to validate flawed wills if certain “fundamental elements” of the will are present and the court has no doubt that the will “represents the true and free wishes of the testator.” This Paper attempts to explore the meaning and implications of the statutory burden of proof set by Section 25. The section was amended in such a manner as to end case law disputes, arising over the years, regarding the character of flaws which may be overcome through the use of this burden. Such flaws had been known as “dynamic elements,” as opposed to flaws which are so constitutive as to preclude the use of Section 25. 

In Part II, I briefly present background regarding the conceptual and normative framework in which probate law functions. In Part III, I discuss Section 25’s role within the Succession Law and in the general framework of inheritance law; I will also examine the interpretation of Section 25 in the Supreme Court case law. According to this interpretation, judicial examination must determine beyond any doubt that the will, though flawed, expresses the free and true wishes of the testator. I criticize the approach taken by the Supreme Court. Its interpretation, even if practicable, seems to lay an unbearable burden on the party wishing to validate the will, and is at odds with the objective of the Succession Law in general and of Section 25 in particular: realization, to the extent possible, of the testator’s wishes. In Part IV, I delineate a general theory of the “wishes” protected by and based in the Succession Law. In Part V I use this theory to develop a model for the analysis of the burden of proof set by Section 25. I do this using disutility equations based on classic considerations in decision-making under conditions of uncertainty; my conclusion is that the burden of proof currently imposed by courts on a beneficiary seeking to validate a flawed will is considerably stricter than it should ideally be.

Finally, I summarize, and touch on “heretical” doubts as to whether the realization of the testator’s wishes can indeed be established as the logical base of inheritance law.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 20, 2017 in Articles, Current Events, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Tuesday, September 19, 2017

Article on Borrowing in the Shadow of Death: Another Look at Probate Lending

Payday-loan-storeDavid Horton recently posted an Article entitled, Borrowing in the Shadow of Death: Another Look at Probate Lending, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

“Fringe” lending has long been controversial. Three decades ago, demand for subprime credit soared, and businesses started to offer high-interest rate cash advances, such as tax refund anticipation loans, payday loans, and pension loans. These products have sparked intense debate and are subject to a maze of rules. However, in Probate Lending, 126 YALE L.J. 102 (2016), a co-author and I examined a form of fringe lending that has gone largely unnoticed: firms that pay lump sums in return for an heir or beneficiary’s interest in a pending decedent’s estate. Capitalizing on a California law that requires companies to file these contracts in probate court, we analyzed seventy-seven loans that stemmed from deaths in 2007. In this companion Article, I report the results of a study of an additional twenty-two months of probate records. My research provides hard evidence about the multi-million dollar inheritance-buying industry, including the prevalence of loans, characteristics of borrowers, how often lenders are repaid, and annual interest rates. I then use this data to compare probate lending to other species of fringe lending and to outline how courts and lawmakers should regulate the practice.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 19, 2017 in Articles, Estate Administration, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Monday, September 18, 2017

Article on Fiduciary Duties in Bankruptcy and Insolvency

DutyJohn A. E. Pottow recently posted an Article entitled, Fiduciary Duties in Bankruptcy and Insolvency, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

Although discussed nowhere in the U.S. Bankruptcy Code, fiduciary duties play a central role in guiding the administration of an insolvent debtor's assets. This book chapter explores the fiduciary obligations of trustees (including DIPs) under both statute and common law, with a special focus on the intrinsic conflicts that arise within the "menagerie of heterogeneous creditors" that constitute the claimants of a bankruptcy estate.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 18, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Saturday, September 16, 2017

Article on A Normative Approach to the Quistclose Trust

NormEmily Hudson recently posted an Article entitled, A Normative Approach to the Quistclose Trust, Wills, Trusts, & Estate Law eJournal. Provided below is an abstract of the Article:

Whilst much of the existing writing on this topic has focused on the better classification of such trusts – for instance, whether they are express, resulting, constructive or sui generis – this article asks why the law should recognise a trust in addition to any underlying legal relationship. Four key justifications are addressed, based on respecting party intention, unconscionability, fairness, and the incentivisation of desirable transactions. It will be argued that: (i) there are difficulties with each of these justifications, although an intention‐focused explanation is probably the most convincing; and (ii) the existing law and commentary lacks coherence and consistency, as seen in the mismatch between normative and doctrinal analysis, and the failure to properly address the ramifications of the Quistclose trust during insolvency.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 16, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Thursday, September 14, 2017

Article on The Use of Wills and Asset Protection Trusts in Fraud and Other Financial Crimes

ZNicole F. Stowell, Erik Johanson, & Carl Pacini recently published an Article entitled, The Use of Wills and Asset Protection Trusts in Fraud and Other Financial Crimes, 65 Drake L. Rev. 509 (2017). Provided below is an abstract of the Article:

According to the Internal Revenue Service, 2.9 million Form 1041 (domestic trust) tax returns were filed in 2009. It is predicted that beneficiaries will receive wealth transfers in the tens of billions passing via trusts. Accompanying this growth has been a proliferation of abusive estate planning, such as asset protection trust schemes to reduce income and tax liability; illegal techniques to depreciate personal assets, deduct personal expenses, and underreport income; and participation in money laundering. This Article highlights and analyzes wealth transfer and preservation fraud and trust schemes, scrutinizes both offshore and domestic asset protection trusts, and provides red flags of fraud to assist in the prevention and detection of wealth transfer and preservation fraud schemes.

September 14, 2017 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Wednesday, September 13, 2017

Article on Note: Nursing Home Abuse of Agents: Creditor Misuse of New York's Revised Durable Power of Attorney

Elder abuseWilliam P. Davies recently published an Article entitled, Note: Nursing Home Abuse of Agents: Creditor Misuse of New York's Revised Durable Power of Attorney, 79 Alb. L. Rev. 1433 (2015/2016). Provided below is an abstract of the Article:

According to the Third Restatement of Agency, “[a] written instrument may make an agent’s actual authority effective upon a principal’s loss of capacity, or confer it irrevocably regardless of such loss.” A commonly used device that confers agency, and does not terminate upon incapacity, is known as a Durable Power of Attorney (“DPOA”). While such a device can be useful to avoid government and court involvement in the event of incapacity, it can also be dangerous. Without proper safeguards, the agent under a DPOA can use the device to exploit an elderly principal. Due to the danger of abuse of the principal at the hands of the agent, state legislatures have enacted various measures to protect principals. However, as this paper sets out, some reforms that combat DPOA abuse may be contrary to the purpose of the device. One of these reforms is the Special Proceeding available to third parties pursuant to the New York General Obligations Law section 5-1510(3), which in its current form allows creditors to bypass the protections offered by New York Debtor Creditor law. 
In order to understand how the special proceeding came to be in its current form, this paper will discuss the history of the DPOA on a national scale, its application in New York, and the various measures taken by New York and other states to ensure agents do not abuse the power granted to them by principals who are no longer competent to manage their affairs. 

September 13, 2017 in Articles, Disability Planning - Health Care, Elder Law, Estate Administration | Permalink | Comments (0)

Saturday, September 9, 2017

Article on The Perils of Federalizing the Common Law: A Case Study of the Income Tax Act Gift Concept

Tay swiftKathryn Chan recently published an Article entitled, The Perils of Federalizing the Common Law: A Case Study of the Income Tax Act Gift Concept, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Civilian jurists have long been concerned to defend the integrity of the Quebec civil law tradition against the colonizing tendencies of federal legislation and its associated case law. In this piece, I argue that common law jurists should share these concerns. To illustrate this point, I focus on the federal courts’ misuse of the term “common law” to describe the meaning they have attached to the statutory term “gift/don” under sections 110.1 and 118.1 of the federal Income Tax Act. In fact, I argue, the meaning that the Federal Courts have attached to the term gift/don is an “ordinary non-technical” meaning, which is distinct from both the civil law concept of gift set out in the Civil Code of Québec and the common law concept of gift that forms part of the law of property in Canada’s common law provinces. I describe how the ordinary and common law concepts have elided under Canadian tax law, and describe the doctrinal confusion that has resulted from this elision. Finally, I consider the mischaracterization of the common law of gift from the perspective of tax law’s relationship with the larger legal system. Building on a theme recently taken up by J Scott Wilkie and Peter Hogg, I argue that the mischaracterization of the ITA gift concept matters, both because it creates the impression of a state of affairs that is inconsistent with our constitutional framework, and because it harms the integrity of the private law. I conclude that the federal courts should clarify that the ITA gift concept is an ordinary non-technical concept, even if it forces them to confront difficult questions about its relationship with provincial private law.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 9, 2017 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Friday, September 8, 2017

Article on Competing Views on Illusory Trusts: The Clayton V Clayton Litigation in Its Wider Context

IllusionistMark J. Bennett recently published an Article entitled, Competing Views on Illusory Trusts: The Clayton V Clayton Litigation in Its Wider Context, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

This article considers the concept of a trust that is 'illusory' - not in fact a trust - due to the settlor or trustee being provided with excessive powers of control or benefit by the trust deed. The New Zealand case Clayton v Clayton [2016] NZSC 29 and the earlier decisions are examined, in the context of the literature on settlor control and the irreducible core of the trust.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 8, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)