June 16, 2013
Article on In re Gilmore
Andrew C. Thompson (New York Law School, J.D. 2013) recently published an article entitled, In re Gilmore, 57 N.Y.L. Sch. L. Rev. 637 (2012-2013). Provided below is a portion of his introduction:
In In re Gilmore, the New York State Appellate Division, Second Department, considered a very complex after-born child issue: whether a testator's biological children, who were born before the execution of a will, whose existence was unknown to the testator at the time of the will's execution, and who became known to the testator prior to his death, can qualify as after-born children within the meaning of EPTL 5-3.2. Allowing these children to qualify would require courts to recognize a new common law exception to EPTL 5-3.2 for after-known children--that is, biological children whose existence the testator realized only after the execution of her will. Arguably, after-known children are comparable to the existing common law adoption exception, which permits children adopted by the testator after the execution of her will to qualify as after-born children even if the child was born before the execution of the will. However, despite the similarities between adopted children and after-known children, the Second Department in Gilmore refused to recognize after-known children within the meaning of EPTL 5-3.2.
This case comment argues that the Second Department incorrectly grounded its ruling in a plain meaning interpretation of EPTL 5-3.2 when it should have premised its holding on an analysis of Gilmore's intent. The Second Department's plain meaning interpretation of EPTL 5-3.2 deprives the lower courts of the flexibility to equitably distribute a parent's assets to her children in a manner that is most in harmony with the overall intent of the testator. While the early statutory and common law origins of EPTL 5-3.2 demonstrate that it is designed to avoid inadvertent or accidental disinheritances of children, another important purpose of the statute is to achieve an equitable distribution of a parent's estate that is consistent with the parent's presumed intent. Thus, rather than imposing a strict rule excluding all after-known children from the protection of EPTL 5-3.2, the solution should be to give the courts a framework with enough flexibility to carry out the intent of the testator. By permitting the courts to either include or exclude after-known children from inheriting a portion of the parent's estate based on the particular circumstances of each case, such a framework would more effectively allow the testator's intent to remain the focus of asset distribution under the will.
This case comment will first introduce the factual and procedural history that led to the Second Department's decision in In re Gilmore. It will then proceed by examining the legislative history and judicial precedent behind EPTL 5-3.2, demonstrating how nineteenth-century interpretations of the after-born statute have focused primarily on preserving the intent of the testator. The third section of this comment will demonstrate how early twentieth-century cases, while straying from the conclusions reached in nineteenth-century cases, nevertheless consistently retained the testator's intent as the primary focus of the analysis. The fourth section will explore how a series of amendments to the statute, beginning in 1966, aimed at ensuring that a will comports with the final wishes of the testator. Finally, this comment will show how the Second Department's recent decision in In re Gilmore departed dramatically from the historical purpose of the statute by imposing a strict rule that disregards testator intent.
Estate-Planner's Playbook For 2013
Steve R. Akers (Senior Fiduciary Counsel, Southwest Region) recently published an estate planner's guide entitled,The Estate Planner's "Playbook" for 2013 and Going Foward Under the Post-ATRA "New Normal" of Permanent Large Exemptions and Portability, (2013). Provided below is the introdution to the article:
The 47th Annual Philip E. Heckerling Institute on Estate Planning was again held in Orlando during the week of January 14, 2013. I have summarized some of my observations from the week, as well as other observations from various current developments and interesting estate planning issues. My goal is not to provide a general summary of the presentations. The summaries provided on the American Bar Association Real Property, Trust & Estate Law Section website that are prepared by a number of reporters, and coordinated by Joe Hodges, do an excellent job of that. In addition, there are excellent summaries provided by Martin Shenkman on the Leimberg Information Services reports. Rather, this is a summary of observations of selected items during the week as well as a discussion of other items. I sometimes identify speakers, but often do not. I take no credit for any of the outstanding ideas discussed at the Institute — I am instead relaying the ideas of others that were discussed during the week.
A major focus of the Institute was estate planning under the “new normal” of transfer tax certainty, large indexed transfer tax exemptions, and portability provided by the American Taxpayer Relief Act of 2012 (ATRA). This summary focuses on practical planning issues that estate planning professional will be facing in this new environment. Topics include:
• legislative matters and proposals (Items 1-4);
• planning for donors who made 2012 gifts, including compliance details (Items 5-6);
• planning approaches for various categories of clients going forward in light of permanent large indexed exemptions and portability (Item 7-8);
• planning considerations for the new 3.8% Medicare tax on net investment income (Item 9);
• strategies to preserve basis at death (turning some traditional planning on its head) (Item 10-11);
• wealth transfer planning strategies leaving some indirect access for the donor and donor’s spouse (Items 12-25);
• other sophisticated wealth transfer planning strategies (including using defined value clauses) (Items 26-34);
• planning considerations for commonly used intra-family loans and notes (Item 35); and
• various other practical planning issues (Items 36-42).It is hoped that this summary might be a useful “playbook” for planning under the new post-ATRA paradigm of permanent high indexed exemptions, portability, and higher income taxes
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
June 15, 2013
Article on Unworthiness to Inherit in Scotland
John MacLeod (Lecturer, University of Glasgow) & Reinhard Zimmermann (Professor, Bucerius Law School, Hamburg) recently published an article entitled, Unworthiness to Inherit, Public Policy, Forfeiture: The Scottish Story, 87 Tul. L. Rev. 741 (2013). Provided below is the abstract to the article:
The concerns addressed by the civilian rules on unworthiness to inherit (indignitas succedendi) must be addressed by any legal system. When they arose in Scotland, responses tended to be found by the extension or development of other rules. Even where there was reference to the idea of unworthiness, as in the Parricide Act 1594 and in Buchanan v Paterson (1704), the result was later re-conceptualized along different lines. In recent years, the Scottish courts have been more receptive to the public policy principle that no one is to benefit from his or her own wrong, taken from the English common law. Even there, however, the Scottish courts have shown a reluctance to follow foreign authorities too closely. The result is a series of shoots, each taking a slightly different direction and none of them growing to maturity. Thus, whatever might be said about Lord Cooper's characterization of Scottish legal history as a story of “false starts and rejected experiments” on a general level, it is certainly an accurate description of the story told in this Article, that is, of the treatment of persons who do not deserve to inherit in Scots law.
It is remarkable how much of the discussion in Scots law is focused on cases involving the killing of the deceased. The differences between the unworthiness and the public policy approach do not in fact play a role in this situation and that is probably the reason why they have not elicited much comment. Beyond killing there is hardly any case law. One of the main reasons for this appears to be that other legal devices are available to take care of many, perhaps most, of the practical problems that may be raised in other instances of unworthiness to inherit.
June 14, 2013
Gallo Tries To Help Family Business Succeed
For the last year, Eileen Gallo, Ph.D., has been working with a business committee of the American College of Trust and Estate Counsel on a project to increase the success of family business’s being passed down from one generation to the next. Typically, the largest investment for a wealthy client is the family business. Unfortunately, the odds that the family business will be successfully passed down are slim. According to a Harvard Business Review article, less than one-third of family businesses are passed down to a second generation and even less are passed on to a third generation.
To help address this issue, Gallo is co authoring an article called “The Use and Abuse of Incentive Trusts: Improvements and Alternatives,” that coins a new approach to trust drafting that she claims would “encourage financial literacy through provisions that are clear, objective, and correlated with the beneficiary’s ability to manage money responsibly.” The approach is called Results Oriented Trust Environment, or ROTE™. It was developed when the authors were asked to create a trust to motivate a potential beneficiary to manage money responsibly. The team analyzed both intrinsic motivation (motivation that comes from within) and external motivation (such as rewards or penalty) and found that internal motivation works far better if the behavioral goal includes being creative, or problem solving. Gallo has also developed a column dedicated to business skills trust that will help people become business savvy.
See Eileen Gallo, Investing in Future Generations: Evolution of the Business Skills Trust, Journal of Financial Planning, Jun. 1, 2013.Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
Article on Mandatory Disclosure Provisions of the Uniform Trust Code
John Spencer Treu (J.D., CPA) recently published an article entitled, The Mandatory Disclosure Provisions of the Uniform Trust Code: Still Boldy Going Where No Jurisdiction Will Follow - A Practical Tax-Based Solution, 82 Miss. L.J. 597-649 (2013). Provided below is the introdution to the article:
The mandatory disclosure provisions of the Uniform Trust Code (UTC) have failed to gain acceptance among adopting jurisdictions because the drafting committee took a reform-based approach that is extreme in terms of attempting to protect beneficiaries’ interests over the intent of settlors. As a mandatory provision, the disclosure provisions in the UTC control in all situations even if directly contrary to the plain language of the trust. This is distinguished from the default provisions, which apply wherever the trust instrument is silent as to a particular issue. The UTC, as initially drafted and subsequently amended, proposes substantial mandatory-reporting requirements for trustees of all irrevocable trusts regardless of the settlor’s explicitly stated intent to the contrary.
The mandatory-disclosure provisions have been universally rejected by adopting jurisdictions. These jurisdictions have elected to either delete the provisions altogether or modify the provisions to limit their scope. The overriding purpose of any uniform law is to achieve uniformity among the several adopting jurisdictions. This would be particularly helpful in trust law where the common law is sparse in many jurisdictions. The mandatory disclosure provisions of the uniform trust code have failed to achieve uniformity and, as such, have failed to achieve their primary purpose and the most recent version of the mandatory-disclosure provisions of the UTC acknowledges that uniformity is unlikely to be achieved as to these provisions. However, with a majority of jurisdictions electing to eliminate the mandatory nature of the disclosure provisions and a minority of adopting jurisdictions following a different model, a reasonable amount of uniformity may still be achieved by simply revising the UTC to follow one of these two groups of adopting jurisdictions.
While uniformity is the overriding goal of any uniform law, the merits of the law apart from its propensity for adoption warrant careful consideration and may inform the dialogue as to why the various jurisdictions have deemed the UTC mandatory disclosure provisions unworthy of adoption. The mandatory provisions have been supported by academics and the UTC drafting committee as a necessary encroachment on the rights of the settlor in order to protect the beneficiaries’ rights and, in so doing, protect the intent of the settlor. The argument seems to be that the UTC gives the settlors what they would really want if fully informed rather than what they think they want. A significant weakness in this logic is that the mandatory-disclosure provisions rely exclusively on the trustee to make the disclosures that will allow the beneficiaries to protect themselves against the malfeasance of that same trustee. A self-reporting regime provides a weak internal-control environment and certainly does not provide the type of protection that should merit overriding the intent of the settlor in all circumstances.
The largest group of UTC adopting jurisdictions simply deleted the mandatory-disclosure provisions altogether, and so the maximum level of uniformity would be achieved if the UTC drafting committee also deleted the mandatory-disclosure provisions in UTC section 105. Although, the drafting committee could achieve a similar result by introducing a simple tax-based disclosure provision stating that the trust instrument cannot override the reporting requirements under the internal revenue code. Such a provision would be appropriate if the drafting committee elects to abandon the current UTC mandatory disclosure provisions.
Alternatively, if the drafting committee cannot reconcile its desire to promote beneficiaries’ rights with a complete deletion of the mandatory disclosure provisions, then the committee could revise the UTC mandatory disclosure provisions by following the Washington D.C. Model (D.C. Model). The D.C. Model provides for a more robust internal control environment by introducing a disinterested third party as a watchdog to receive disclosures and thereby protect the beneficiaries against trustee malfeasance. Because this model has been followed by other jurisdictions and provides a more robust control environment, adopting the D.C. Model would represent a true compromise between the competing policy concerns. While still favoring reform over uniformity, if the UTC adopted the D.C. Model, it would at least represent a small minority of jurisdictions, as opposed to no jurisdiction at all. Inasmuch as the primary purpose of the UTC is to achieve uniformity among the several states, the UTC drafting committee would be remiss if it failed to adopt either option and left the mandatory-disclosure provisions contained in the current version of the UTC in place.
June 12, 2013
Article on Digital Afterlife
Stephen S. Wu (Attorney, Los Altos) has recently published an article entitled, Digital Afterlife: What Happens to Your Data When You Die ?, (May 2013). Provided below is the introduction to the article:
The world is changing around us as we move into the Information Age. Before industrialization, wealth resided in real property and tangible personal property, such as precious metals. In the Industrial Age, people accumulated wealth from manufacturing, making profits from industry, and in banking and financial systems to store wealth in financial accounts. During the estate planning process, people managed conventional types of assets such as real estate, financial accounts, financial instruments, precious metal, tangible personal property and the like.
Times have changed, though. People now realize the value of digital assets and data. What happens to your digital assets and data after you die? How are they handled if you become disabled during your lifetime? Our legal system is just now beginning to address these issues.
The Internet has created an ecosystem of online services allowing us to communicate, conduct business, hold value, share information, display photos, art, and works of authorship, and entertain ourselves. For instance, people are increasingly using online service providers to host email, such as Google Gmail. Also, people use online PayPal accounts to store money, receive payments from customers and relatives, and make payments to vendors. People can store and back up files using online services instead of local hard drives. Examples of these services include Google Drive, Microsoft SkyDrive, Box, and Dropbox. Many cloud computing applications are available to perform functions and process and store data remotely through the Internet.
In virtual worlds, people can explore synthetic 3D worlds, engage in social networking, own virtual real property, and enjoy virtual goods such as cars, furniture, and decorations. The Second Life® service is the leading example of a virtual world, while in many ways the World of Warcraft® video game is itself a virtual world. One landholder in the Second Life, Anshe Chung, has real estate holdings exceeding $1 million USD. The market for virtual goods in the U.S. has grown rapidly and likely exceeded $3 billion in 2012. The market is expected to grow briskly in later years.
With online assets having real, or at least sentimental value, individuals, estate planners, and the legal system will need to determine what happens to online assets upon death or disability. As a society, people are spending more time on the Internet and moving their assets online. Accordingly, estate planners will need to account for their clients’ online assets in the estate planning process. Moreover, the legal system will need to address the enforceability of estate plans specifying a disposition of online assets and determine what happens when people have not specifically planned for their assets’ disposition.Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
June 11, 2013
Article on Applicable Law to Succession Upon Death in the European Parliament
Isabel Rodriguez-Uria Suarez (University of Santiago de Compostela) has recently published an article entitled, The Applicable Law to Succession Upon Death in the New Regulation (EU) No. 650/2012, (April 2013). Provided below is the abstract from SSRN:
This paper analyzes the applicable law to the succession mortis causa as defined by the Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession. The general rules determining the lex successionis and the special rules setting out the applicable law to wills as well as the agreements as to succession are the main subject of this article. The scope of the aforementioned laws is also analyzed thoroughly.
June 10, 2013
Article on Intestate Succession of Collateral Relatives in Catalan
Jaume Tarabal (University of Barcelona) has recently published an article entitled, The Intestate Succession of Collateral Relatives in the Catalan Civil Code, (April 2013). Provided below is the abstract from SSRN:
This paper examines the Catalan rules governing the intestate succession of collateral relatives (arts. 442-9 to 442-11 CCCat) bearing in mind that they are the result of a tense evolution. The aim is to justify its peculiarities, to solve their interpretative problems and to assess the underlying policy options.
Note: Downloadable document is in Spanish.
June 09, 2013
Article on the Representation of Fiduciaries
Kennedy Lee recently published an article entitled, Representing the Fiduciary: To Whom Does the Attorney Owe Duties?, 37 ACTEC L.J. 469 (Winter 2011). Provided below is the beginning of his introduction:
A fiduciary relationship is a familiar concept to attorneys. When representing a client, attorneys are expected to “act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf.” Judge Cardozo eloquently explained that fiduciaries, which include attorneys, should act with “the punctilio of an honor the most sensitive.” However, even though an attorney owes a high degree of diligence and commitment to a client, questions abound regarding the attorney-client relationship when the client is acting in a fiduciary capacity. These situations can arise when an attorney represents a conservator, a guardian, a custodian under the Uniform Transfers to Minors Act, an agent acting under a power of attorney, a trustee of a trust, or a personal representative of an estate. These last two situations, a trustee and a personal representative, are likely the most common and therefore will be the primary examples used in this paper.
When an attorney represents a fiduciary, some confusion exists as to who the real client actually is and to whom the attorney owes fiduciary duties. Most theories suggest that the client is either the fiduciary, the beneficiary, the estate, or some combination thereof. Unfortunately, courts have not been uniform in answering this question, leaving attorneys without clarity and guidance. While most jurisdictions have no law on this issue, the various jurisdictions that have attempted to provide direction in this area have adopted one of three major approaches: (1) the traditional theory, under which the attorney represents only the fiduciary, (2) the joint-client theory, under which the attorney represents the fiduciary and the beneficiary, or (3) the entity theory, under which the attorney represents the trust or estate. This paper will examine each approach and some of the associated consequences.
Article on More Coherent Limitations Period for ERISA Breach of Fiduciary Duty
Raphael Janove (Law Review, University of Chicago School of Law) has recently published an article entitled, All Out of Chewing Gum: A Case for a More Coherent Limitations Period for ERISA Breach of Fiduciary Duty Claims, (May 17,2013). Provided below is the abstract from SSRN:
This Comment addresses a circuit split regarding an interpretation of the phrase “fraud or concealment” in ERISA’s statute of limitations for breaches of fiduciary duty. The majority rule fuses the two words into “fraudulent concealment” and the minority rule reads the phrase as “fraud or fraudulent concealment”. My Comment proposes an alternative interpretation based on the common law of trusts.
June 08, 2013
Article on Cotenancy
John V. Orth (William Rand Kenan, Jr. Professor of Law, University of North Carolina School of Law) recently published an article entitled, Presumed Equal: Shares of Cotenants, 37 ACTEC L.J. 463 (Winter 2011). Provided below is the beginning of his article:
For most of the long history of the common law, land was the most important asset and its ownership could be divided up in many ways. An interest in real property could be a present interest, such as a life estate or a fee simple; or it could be a future interest, such as a remainder or a reversion. Land could be held in trust for the benefit of another. A right to possession for a term of years could be created by a lease. A right of use could be created by an easement. Duties incident to ownership could be imposed by a real covenant or an equitable servitude. Land could be owned by one person in sole ownership, or it could be owned by two or more concurrently as tenants in common or as joint tenants. Married persons could take title to land as tenants by the entirety.
At common law the shares of cotenants depended on the type of estate. In tenancies by the entirety the shares were equal because each spouse owned the whole, title being held not by two persons but by the marital unit. In joint tenancies the shares were equal by definition. For a joint tenancy to exist, the “four unities” of time, title, interest, and possession were required. If the shares of the cotenants were not equal, the unity of interest would be lacking and the estate could not be a joint tenancy. The tenancy in common required only the unity of possession, so the shares of cotenants could be unequal. But even here the shares were presumed equal in the absence of evidence to the contrary.
Today the story is not so simple. Tenancies by the entirety that end with the divorce of the spouses - a possibility unknown to the common law - default into tenancies in common and are subject to equitable distribution. Joint tenancies in many states are now exempted by statute from the required unity of interest. While retaining the right of survivorship, the new joint tenancies otherwise resemble tenancies in common. In consequence, the presumption of equal shares that once applied only to tenancies in common now extends to joint tenancies as well, focusing additional attention on the evidence necessary to rebut it. A clear expression of intention to hold other than equal shares poses no difficulty. A will or deed could grant an estate to multiple grantees and describe the respective shares of each. The problems arise when the intention is implied rather than express.
June 06, 2013
Article on Estate Tax Deductions
Daniel Baltuch recently published an article entitled, Estate Tax Deductions for Interest Paid on Loans Taken in Order to Pay Estate Taxes, 37 ACTEC L.J. 407 (Winter 2011). Provided below is the introduction to his article:
This paper will discuss the various issues involved with the estate tax deductibility of interest expenses for loans taken in order to pay estate taxes. The basis for such deductions, taken against the gross estate, is found in § 2053 of the Internal Revenue Code, which allows deductions, inter alia, for administration expenses, 1) “as are allowable by the laws of the jurisdiction.”1 The regulations provide the other two principal requirements an administration expense must meet in order to be deductible: 2) the expense must be “necessary,” and 3) it must be “actually incurred.”2 What is actually required to satisfy these three elements has been developed in the Federal case law, the regulations, and other I.R.S. materials. Section I of this paper provides an introduction to the subject. Section II will discuss the necessity requirement. Section III will discuss the actually incurred requirement. Section IV will discuss the state law allowability requirement.
Article on Ohio Legacy Trust Act and Asset Protection Trust Implications
Kevin R. McKinnis (Associate Editor, Cleveland State Law Review) recently published an article entitled, The Good, the Bad and the Poor Man's Prenup: An Analysis of the Ohio Legacy Trust Act and What Asset Protection Trusts Will Mean for Ohio, ( March 18, 2013). Provided below is abstract from SSRN:
This law review note, forthcoming in The Cleveland State Law Review, provides an in-depth analysis of the Ohio Legacy Trust Act and explores the potential effects the Act will have on Ohio. This note also explores the requirements to establish a Legacy Trust and the potential federal income and estate tax consequences. In the latter portion of the note, the possible ethical implications for Ohio attorneys is examined, as well as the arguments creditors will make when attempting to void a disposition to a Legacy Trust.
June 05, 2013
Article on Natural Descendants
Emese Florian recently published an article entitled, Legal Applied Anatomy- 'After the Death of the Child, it Can Be Recognized Only if He Left Natural Descendants, [Art. 415 Para. (3) Civil Code] (May 13, 2013). Provided below is the introduction to the article from SSRN:
According to the Romanian Civil Code, the recognition of filiation, paternal or maternal, regard both babies, alive and also the dead babies. In case of the recognition of predeceased children, under the penalty of the filiation confidence cancellation, it is necessary that this one "should left natural descendants” [Art. 415 paragraph (3), lit. b) of the Civil Code].
Special thanks to Robert Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.
June 04, 2013
Article on Estate Planning for Posthumously Conceived Children
Brooke Shemer (University of Baltimore School of Law, J.D. 2013) recently published an article entitled, Estate Planning for the Posthumously Conceived Child: A Blueprint for the Sperm Donor, 42 U. Balt. L. Rev. 181 (Fall 2012). Provided below is the introduction to her article:
In 2003, Gayle Burns became pregnant through artificial insemination using the preserved sperm of her husband, who died from cancer two years earlier. In his contractual agreement with the reproductive clinic, Michael Burns indicated his intent to prevent destruction of his sperm in the event of his death, his consent to assisted reproduction, and his desire to give his wife legal rights to his sperm upon his death. Gayle acknowledged their discussion about having children and her husband's hope for her to conceive his child upon his death; he had even purchased a life insurance policy to provide for Gayle and their child.
Article on Incomplete Wills
Adam J. Hirsch (Professor of Law, University of San Diego) recently published an article entitled, Incomplete Wills, Michigan Law Review, Vol. 111, No. 8, 2013. Provided below is the abstract from SSRN:
This Article explores the problems that arise when a will fails to dispose of an individual's entire estate, so that she dies partially testate and partially intestate. The questions then raised include (1) whether provisions contained in the will purporting to redefine the individual's intestate heirs should supersede the statutory designations of those heirs, (2) whether inter vivos gifts to heirs should qualify as advancements on the inheritances of those heirs under conditions of partial intestacy, and, most broadly, (3) whether courts should fill in the incomplete portions of an individual's estate plan by extrapolating from the distributive preferences set out in the fragmentary will or by independent reference to the statutory rules of intestacy. The intent of testators is bound to vary on each of these points, this article argues. In order to account for this predictable variation, lawmakers should grant courts limited discretion to resolve each of these issues on a case-by-case basis, taking into consideration both intrinsic and extrinsic evidence. Such an approach would differentiate the rules of partial intestacy from complete intestacy, which operates according to mechanical rules. This Article suggests policy reasons for drawing that distinction. The Article supports its analysis with empirical evidence drawn from data sets of published cases, a resource not previously exploited in connection with quantitative studies of inheritance law.
June 03, 2013
Article on Inalienability Voluntary Clauses
Valeriu Stoica (Independent) has recently published an article entitled, Inalienability Voluntary Clause, Romanian Review of Private Law No. 1 (2013). Provided below is the abstract from SSRN:
The inalienability voluntary provision has been accepted in Romanian case law with same limitations from French case law (temporary character, vested and lawful interest).
Concordantly with its legal nature, voluntary provision has as a main effect the narrow of legal provision, attribute contained by the right of private property.
More precisely, the right which is the subject of inalienability clause can not be alienated by legal acts inter vivos, or by conventions.
June 01, 2013
Article on Pensions in British Columbia
The British Columbia Law Institute recently published an article entitled, Questions and Answers About Pension Division on the Breakdown of a Relationship in British Columbia, Wills, Trusts, & Estates Law eJournal, Vol. 9, No. 15 (May 30, 2013). Provided below is the abstract from SSRN:
In March, 1996, the first edition of this book was published to provide materials about the operation of the British Columbia Family Relations Act, and the Pension Benefits Standards Act as these statutes apply when a marriage breaks down and the assets to be divided include benefits in a pension plan. The Q&A was viewed as a helpful resource for family lawyers, plan administrators and their advisors, and former spouses. A revised edition was prepared by the British Columbia Law Institute in 2001.
This third edition is being prepared in anticipation of the Family Law Act, SBC 2011, c. 25 coming into force on March 18th, 2013. Although the Q&A was prepared before that date, for ease of reference the questions and answers assume the FLA is already in force.
The Family Law Act is an important development. It is a major modern restatement of family law that will have far-reaching repercussions for decades to come. Although much about the new Family Law Act and its pension division rules will be familiar, it will also introduce some fundamental innovations. In contrast to the FRA, Part 6 of the FLA applies equally to married and unmarried spouses. And the pension rules have been modified to provide more nuanced provisions for the division of a wider range of pension benefits, such as benefits under supplementary plans, and benefits in individual pension plans, while at the same time providing more flexibility to former spouses for securing income in retirement. Table 6 in the appendices is a section by section comparison of the FLA and the FRA to highlight what has been changed, and what remains the same.
While the Family Law Act is the product of exhaustive and expert work of the Ministry of the Attorney General, it is with great pleasure that the Institute notes that many of the pension division refinements are based on recommendations made by the British Columbia Law Institute in Report on Pension Division on Marriage Breakdown, A Ten Year Review of Part 6 of the Family Relations Act (Report No. 44, May, 2006).
The materials are in the form of Questions and Answers. The Questions and Answers are intended to be a reference to help resolve questions that might arise. Some of the questions raise very obscure points that are relevant for only a few plans. For the most part, most people should find the introductory portions of the Chapters in this book, as well as the Checklists in the Appendices, sufficient guides for applying the B.C. legislation. But if more difficult issues arise, this Q&A attempts to provide guidance on how to deal with them.
The materials address questions raised by members and their spouses, plan administrators, plan advisors, and lawyers. Not all of the information will be of interest to people in all of these groups. Plan administrators, for example, will see a great deal of information concerning how to determine reasonable shares between member and spouse on the breakdown of a relationship, but issues like these will be resolved long before the administrator is asked to assist in actually dividing the pension entitlement.
The information has been sorted into Chapters based on whether the member's pension has commenced at the time of the breakdown of a relationship, the kind of plan, and other categories, but to divide the information so that it would be useful to specific groups, such as just plan administrators or just lawyers or just former spouses, would have led to a great deal of duplication.
In most cases, there is no doubt about the position under the legislation, but some questions raise very complicated points. Basically, the legislation speaks for itself and the final position will be answered by the courts.
May 31, 2013
Article on Marshall v. Commissioner
Eric Bennett Rasmusen (Indiana University Bloomington) recently published an article entitled, The Meaning of 'Value' for Gift and Estate Tax Donee Limitations in Tax Code 26 U.S.C. § 6324(B): An Amicus Brief for Marshall v. Commissioner, Wills, Trusts, & Estates Law eJournal, Vol. 9, No. 15 (May 30, 2013). Provided below is the abstract from SSRN:
In 1995, J. Howard Marshall II made a gift to Elaine Marshall worth some $43 million at the time of transfer. The IRS assessed gift tax against his estate, which failed to pay. In 2008 the IRS assessed gift tax of $74 million against donee Elaine Marshall, which exceeds $43 million because of the interest accumulated since 1995 but is less than the $81 million the gift would compound to at 5% per year. Does the limitation on donee liability to “the value” of the gift imposed by 26 U.S.C. § 6324(b) mean to “the original amount of the gift”, or to “the value of the gift at the time of eventual tax payment”? The appellate courts are split on this. That is the issue in Marshall v. Commissioner, which is now before the 5th Circuit. This paper is an amicus brief in that case and, I hope, a good example of how economics can inform and simplify law.
Article About Valuing Fractional Interest In Art For Tax PurposesWendy C. Gerzog, (Professor of Law, University of Baltimore School of Law) recently published an article entitled, Valuing Fractional Interests in Art for Estate Tax Purposes, (May 30, 2013). Tax Notes, Vol.139, No.9, 2013. Provided below is the abstract from SSRN:
It is difficult to value fractional interests in art because there is virtually no market in those interests. Nevertheless, the Tax Court in Estate of Elkins valued the decedent’s fractional interests in multiple artworks, which the decedent and his children highly cherished. First, the court addressed the restricted agreements under section 2703 and then the court determined the value of decedent’s interests in the art.