Wills, Trusts & Estates Prof Blog

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

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Thursday, August 28, 2014

Article on Inheritances and Promised Lands

Patricia a. cain

Patricia A. Cain (Santa Clara University School of Law) recently published an article entitled, Family Drama: Dangling Inheritances and Promised Lands (2014). Tulsa Law Review, Vol. 49 (2013); Santa Clara Univ. Legal Studies Research Paper No. 10-14.  Provided below is the abstract from SSRN:

This paper reviews Hartog’s 2012 book, Someday All this will be Yours: A History of Inheritance and Old Age. Relying on case documents from trial courts in New Jersey in the early twentieth century, Hartog tells the rich stories behind these cases. The cases involve claims by family members, usually sons or daughters, who were promised inheritances in exchange for taking care of an aged parent. Sometimes those promises are enforced and sometimes not. The stories behind the cases, and Hartog’s observations about them. should be of interest to teachers and scholars of wills, trusts, and estates.

August 28, 2014 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Article on Defining Duties of the Trustee’s Delegates

William EcholsWilliam S. Echols (J.D. Candidate, Texas Tech University School of Law, May 2015) recently published a comment entitled, Action in the Chasm: Defining Duties of the Trustee’s Delegates, Estate Planning and Community Property Law Journal, Vol. 6 Bk. 2, Summer 2014. Provided below is the introduction of the comment:

The first question begged by the title, is “what is a chasm?” The answer to that, within the confines of this Comment, is the space that either legislative of judicial action leaves undefined. The specific chasm in this piece is that of the duties owed by a person to whom the trustee delegates fiduciary authority. In most instances, this will be an agent of the trust, whose duties to the beneficiaries are undefined by the contract or the trust instrument, which makes the agent’s liability an open question. This question of liability is an area that remains unanswered by the judiciary and substantially so by legislatures as well.

August 28, 2014 in Articles, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 27, 2014

Article on The Public Trust Doctrine and Issues Regarding Estate Planning for the Cervid Breeding Industry

Kirby CrowKirby L. Crow (J.D. Candidate, Texas Tech University School of Law, December 2014) recently published a comment entitled, Oh Deer: The Public Trust Doctrine and Issues Regarding Estate Planning for the Cervid Breeding Industry, Estate Planning and Community Property Law Journal, Vol. 6 Bk. 2, Summer 2014. Provided below is the introduction of the comment:

The purpose of this Comment is to describe different routes that an estate planning professional can take to effectuate an estate plan for a cervid breeding operation, with emphasis on Texas regulations. A cervid is “any member of the deer family, Cervidae . . . characterized by the bearing of antlers in the male or in both sexes.” To begin the analysis, it is critical to understand the history of the industry, the economic impact of the industry, and the current direction of the industry. Next, a discussion of opposition groups, regulating agencies, the unique way that the state holds cervids in trust for the people, and the financial burdens of the cervid breeding industry will help determine what kind of business entity would best serve the owner’s goals and whether a trust would serve as the best estate planning technique for the business.

This Comment will also briefly consider the role of the personal representative and the role of the trustee in the cervid breeding industry. The main objective of this Comment is to demonstrate how different types of business entities establish a cervid breeding operation and why a revocable living trust (as compared to a pet trust) is the best vehicle for a cervid breeding operation to convey an owner/operator’s interest at death.

August 27, 2014 in Articles, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 26, 2014

Article on The Story of the Texas Estates Code

Bill PargamanWilliam D. Pargaman (Saunders, Norval, Pargaman & Atkins, LLP) recently published an article entitled, The Story of the Texas Estates Code, Estate Planning and Community Property Law Journal, Vol. 6 Bk. 2, Summer 2014. Provided below is an excerpt from the introduction of the article:

On January 1, 2014, our new Estates Code replaced Texas’ beloved Probate Code, which has been with us for almost six decades—these changes were enacted into law in 2009, 2011, and 2013, and they went into effect on January 1, 2014. But, the story of the Texas Estates Code goes back more than half a century.

Here’s what this article will attempt to discuss: Texas’ fifty-year-old contienuing statutory revision program; the backstory behind our Probate Code; the reasons why Texas replaced the Probate Code with the Estates Code; the organization of the Estates Code; construction issues related to the replacement of the Probate Code; some of the substantive changes that were included with the enactment of the Estates Code; and a few free resources the reader may find helpful.

August 26, 2014 in Articles, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Monday, August 25, 2014

Article on Gratuitous and Contractual Transfers

Adam Hirsch

Adam J. Hirsch (University of San Diego) recently published an article entitled, Formalizing Gratuitous and Contractual Transfers: A Situational Theory, Washington University Law Review, Vol. 91, No. 4 (2014); San Diego Legal Studies Paper No. 13-134.  Provided below is the abstract from SSRN:

By tradition, gifts, wills, and contracts are formalized according to protocols established within each legal category. This Article examines the policies that underlie these "formalizing rules" and concludes that the utility of those rules depends fundamentally on the background conditions under which a gift, will, or contract occurs. Those background conditions, rather than the category into which the transfer falls, dictate the optimal formalizing rule for a transfer. In light of this observation, the Article proposes an integrated approach to formalizing rules that varies the required formalities for a transfer on the basis of situational criteria rather than the prevailing categorical ones.

August 25, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Sunday, August 24, 2014

Article on Posthumously Conceived Children

Daniel Perrone

Daniel C. Perrone (London Fischer LLP) recently published an article entitled, Breaking the Ice: Expanding the Class of “Issue” to Include Posthumously Conceived Children, 27 J. Civ. Rts. & Econ. Dev. 369-392 (2014).  Provided below is a portion of the article’s introduction:

In New York, some innocent children, namely, posthumously conceived children, are suffering the consequences of the state legislature's failure to sync the law with technology. Advancements in biotechnology have enabled people to conceive genetically related children, even after their own death. These children, however, face the dire consequence of being denied inheritance rights, referred to herein as a "class gift," merely because of the circumstances surrounding their birth. Admittedly, posthumously conceived children do not come into the world the way the majority of children do, but they are children, who should be granted the same rights, benefits and privileges that other children enjoy.

August 24, 2014 in Articles, Estate Planning - Generally, Technology | Permalink | Comments (0) | TrackBack (0)

Saturday, August 23, 2014

Article on the Distribution of Funds to Beneficiaries of a Commingled Trust

TrustChristian Chamorro-Courtland (Zayed University) recently published an article entitled, Demystifying the Lowest Intermediate Balance Rule: The Legal Principles Governing the Distribution of Funds to Beneficiaries of a Commingled Trust Account for which a Shortfall Exists (July 16, 2014), Forthcoming, Banking & Finance Law Review. Provided below is the abstract from SSRN:

There has been much legal uncertainty in Canada regarding the best method for distributing commingled trust funds to beneficiaries where a shortfall occurred due to fraudulent misappropriation committed by the trustee or as a result of other operational risks. The case law in this area has been riddled with legal uncertainty. This article analyzes a series of dicta from the Ontario courts that have considered the relevant rules for the distribution of the remaining trust funds in these situations, with a focus on the Ontario Superior Court decision in Boughner et al. v. Greyhawk Equity Partners Limited Partnership (Millenium) et al. (2012). It observes that the judges have continuously muddled up the ‘Basic Pro Rata Approach’ and the ‘Lowest Intermediate Balance Rule’ because there has been a misunderstanding of how these rules operate in practice. Furthermore, it presents a logical method for insolvency administrators and the courts to determine which rule to apply in these situations. It argues that the intention of the beneficiaries should be the main factor determining the method of distribution to be applied.

August 23, 2014 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, August 22, 2014

Article on Digital Estate Planning

Technology

Kathleen Farro (Independent) recently published an article entitled, The ‘Digital First Sale Doctrine’: A Necessary Piece of the Digital Estate Planning Puzzle, (July 15, 2014).  Provided below is the abstract from SSRN:

As technology advances, the aspects of our lives that are played out in the digital realm, both personal and professional, are ever-increasing. We conduct our banking online, we communicate with friends, family and business associates via email and social networks, and we create original, creative works on internet-based applications. Our creative work, professional work, and practical communications that were once limited to oral communication and paper records are now captured, conveyed, and stored digitally. Trading tangible media for the digital realm has become commonplace. Some changes are as simple as the box of photographs stored in the closet that are being replaced by expansive online libraries of digital photographs. On a grander economic scale, for example, is the marketability of a celebrity persona that was once measured by his or her ability to promote products in a newspaper print ad or on a television commercial. Now, the number of people accessing that celebrity’s life, opinions and preferences in the digital realm can have an equal or greater financial effect. 

While this evolution can have many advantages in our every day lives – making thinking, doing, communicating, and working - easier, quicker, more efficient, and less expensive, it can also jeopardize things that we may take for granted in our purely "tangible" life. The digital age may decrease our actual, human interactions and compromise our privacy. It may reduce what may be considered "our property" in the tangible world to something owned and controlled by others when carried out in the digital realm. Within the conversion to a digital world, our property rights, and thus our ability to convey and devise those to others, may, quite literally, get lost in translation. 

The property rights we most frequently give up to carry on life in the digital realm are those that are carried out and promulgated within a framework of copyright-protected material. For example: email, Facebook, Twitter, and various "gaming" activities are copyright-protected. 

For estate planners, these facts present hurdles to carrying out the wishes of those who desire to transfer some of their digital "property" to their loved ones, friends, or others either by devise or within an inter vivos trust. For example, a man may spend years building an iTunes library of music. At $0.99 to $1.29 a song, and likely more in the future, he may invest thousands of dollars over the years in this collection. Upon his death or disability, he may wish to transfer this library to his children. The current law does not allow this; the point at which he himself is unable to use the library, there is no way in which any party can lawfully utilize that song library.

This paper will examine the property rights individuals generally hold in copyrighted material and digital copyrighted material. It provides a thorough explanation of the First Sale Doctrine as applied to tangible media and the limitations on its applicability in the digital realm. It then goes on to explain Congress’s first attempt at incorporating digital media into the First Sale Doctrine in 1998 – what conclusions it drew and why Congress declined to update the doctrine. Between technological advancements, court cases in the U.S. and overseas, and various other legal principles and practices, there are now substantial policy bases for revisiting a "digital" First Sale Doctrine. The implementation of a digital First Sale Doctrine would have far-reaching effects; however, for our purposes, this doctrine would at least provide individuals with assurance that their digital property can be preserved to pass along to others.

August 22, 2014 in Articles, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, August 21, 2014

Article on Letters Non-Testamentary

Deborah gordon

Deborah S. Gordon (Drexel University School of Law) recently published an article entitled, Letters Non-Testamentary, Kansas Law Review, Vol. 62, No. 3 (2014); Drexel University School of Law Research Paper No. 2014-A-03.  Provided below is the abstract from SSRN:

Letters written in anticipation of death, so-called “last letters,” appear frequently in American case law, especially when inheritance is at issue. One common appearance is when such letters are offered to serve as wills for decedents who leave no other written indication of testamentary intent. Even where a properly attested will exists, though, many courts have construed letters as codicils – addenda – to the more traditional instruments, though such letters sometimes contradict or substantially alter the original wills. Courts also use letters as tools for interpreting ambiguous documents and as mechanisms for determining whether a formal property arrangement, a trust or conveyance for example, exists in the first place. Finally, courts have admitted letters into evidence to assess claims that a testator lacked capacity or suffered other testamentary infirmities. In other words, there is no question that last letters have influenced inheritance law and its participants, but just how and why has been unexamined, especially where the letter writers concede that the informal communications are not intended to be binding dispositions of their property or, in other words, where the letters are deliberately “non-testamentary.” 

Sometimes called “letters of wishes,” these letters “non-testamentary” are written by individuals who know and accept the law’s purpose and effect: they choose to execute formal wills to leave property to their loved ones; they choose to sign trusts to interpose a fiduciary between their beneficiaries and their wealth. Yet the authors supplement the legal documents with a written genre that is less formal, less traditional, and ostensibly not legally binding. But such letters non-testamentary tend to reveal what lies beneath the writer’s “will” – both the document and the intention – itself. Because third parties – courts for example – are not a contemplated part of the exchange between writer and recipient, complications arise. 

While others have bemoaned the inconsistencies that such homemade letters produce, this Article takes the opposite position: it argues that letters non-testamentary highlight a productive tension between lawyer-created documents that are clear and tax-efficient but often devoid of feeling and the reality of death as a frightening event that involves messy emotions and relationships. This humble, intuitive, and accessible genre allows writers to connect to their readers and confront their own deaths in a way that the standard instruments often do not. Indeed, property owners turn to the genre to fill emotional, rhetorical, and sometimes even legal gaps. As such, letters non-testamentary help outside readers learn about deficiencies that the current system promotes, like the writers’ lack of confidence with their documents. Finally, homemade last letters are illuminating because they show how ordinary people reconcile the dichotomy between efficiency – getting property where it should go – and emotion that lies at the heart of planning for separation and death. Because a family has much to lose when a will is challenged and much to gain when the probate process is easy and uncontested, a writer who builds empathy in her survivors through a letter non-testamentary may accomplish far more than if she relied solely on her formal documents. 

Recognizing the potential for the contradictions and ambiguities that homemade and informal communications may engender, this Article nevertheless argues that letters non-testamentary play an important role in planning for death, which may be why they have persisted through time and are likely to continue, even as the genre shifts form in today’s digital age.

August 21, 2014 in Articles, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 20, 2014

Article on Bankruptcy Law and Retirement Assets

Supreme court

Albert Feuer (Law Offices of Albert Feuer) recently published an article entitled, The Supreme Court Disregards ERISA and Goes Farther Astray in Applying Bankruptcy Law to Retirement Assets, 33 Tax Management Weekly Report 995 (July 2014). Provided below is the abstract from SSRN:

The Supreme Court decided in Clark v. Remaker, 573 U. S. (Slip Opinion No. 13-299, June 12, 2014) the extent of the bankruptcy exemption for “Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.” This bankruptcy fund exemption applies whether the debtor chooses to use the federal or state law bankruptcy exemptions. 

The Court decided that the bankruptcy fund exemption did not apply to the beneficiaries of an individual retirement account (“IRA”), although the Court appeared to suggest that a spousal beneficiary may obtain the protection to the extent those benefits become part of the surviving spouse’s individual IRA. The Court’s implicit addition of the phrase “debtor’s created” at the start of the exemption is based on its unexamined assumption that otherwise the phrase, “Retirement funds to the extent that those funds are in,” would be rendered “superfluous.” 

The Court asserted that three factors showed that an IRA beneficiary has no interest in retirement funds: (1) IRA beneficiaries, unlike the initial owners, may not make contribution to IRAs, although this is not true after owners attain the age of 70½, so perhaps no IRA owners over the age of 70½ are entitled to the bankruptcy exemption; (2) IRA beneficiaries, unlike the initial owners, must begin taking distributions regardless of their retirement, although IRA owners may take distributions regardless of their retirement, so perhaps no IRA owners are entitled to the bankruptcy exemption; and (3) IRA beneficiaries, unlike the initial owners, may obtain their benefits without incurring a tax penalty prior to attaining the age of 59½, so perhaps no IRA owners over age 59½ are entitled to the bankruptcy exemption. 

Under the Court’s analysis beneficiaries of the tax qualified plans subject to the provision, i.e., those plans that are not ERISA pension plans with broad coverage (another section, which the Court ignored, protects a debtor’s interest in such ERISA plans), are not eligible for the bankruptcy fund exemption because they are subject to the three above conditions. As with IRAs, it is not clear whether spousal beneficiaries may obtain the protection to the extent those benefits become part of the surviving spouse’s individual IRA. 

The phrase “retirement funds to the extent that those funds are in” has a significance without the addition of any words that is consistent with the legislative history of the phrase, the other bankruptcy provisions, and ERISA. In particular the coverage of the exemption section is limited to (1) the tax-qualified plans that meet the definition of ERISA pension plans without its exclusions, such as those for government or church plans, (2) IRA assets, other than those derived from tax-qualified plans that do not meet the first criterion. Under this analysis the bankruptcy fund protection would be available to the participants and beneficiaries of such non-ERISA pension plans. The bankruptcy exemption for benefit payments and benefit funds associated with an ERISA pension plan with broad coverage that the Supreme Court approved in Patterson v. Shumate, 504 U.S. 753 (1992), also applies to participants and beneficiaries who are both protected by ERISA.

August 20, 2014 in Articles, Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)