Wills, Trusts & Estates Prof Blog

New Questions Arise After Hong Kong Allows Transsexual Marriage

Following a court ruling allowing for transsexuals to marry in Hong Kong’s New Territories, new questions have arisen concerning inheritance rights, matrimonial rights, and sex offenses.

By covering male-to-female transsexuals under the definition of “woman,” does a male-to female transsexual lose inheritance rights under Hong Kong’s male-line inheritance?  Does a female-to-male transsexual gain these rights?

Another issue is whether a man with children who chooses to become a female loses her duty to be a “father.”  Also, only women can be raped under Hong Kong law, so can transsexuals be considered victims?

Although the legislature has not yet considered these issues, scholars believe the right to marry will coincide with associated rights of inheritance, divorce, and adoption.

See Patsy Moy and Stuart Lau, Transsexual Marriage Ruling Opens Door to Questions of Inheritance, South China Morning Post, May 14, 2013.

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

IRS Does Not Include Trust Decanting Rules In Guidance Plan

Recently, tax analyst Marie Sapirie has published an article highlighting the fact that there are no trust decanting rules in the 2012 and 2013 priority guidance plan. According to attorney advisor of the Treasury Office of Tax Legislative Counsel, Catherine Hughes, the omission of the rules was a consequence of the IRS's failure to publish the trust decanting rules in time for the priority guidance plan.  

See Kelly Humke, Tax Notes Article by Marie Sapirie: "ABA Meeting: Trust Decanting Rules Still Getting IRS Attention", Wealthstrategiesjournal.com, May 14, 2013.

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

Mother of Heirs to the Doris Duke Fortune Ordered to Explain her Big Spending

Daisha Inman has allegedly blown over $1 million of her children’s $60 million inheritance since 2010. 

Daisha Inman was married to Walker Inman Jr., the nephew of tobacco heiress Doris Duke.  Following his death, the Duke fortune is now held in trust for their twin children. 

Inman “has been ordered to appear in court next month to answer charges that she’s treated their trust funds as a personal piggy bank.”  Inman asserts she has never touched their trust funds and points the finger towards the Citibank and J.P. Morgan trustees who administer her children’s accounts.

See Julia Marsh, Mom of Twin Duke Fortune Heirs Ordered to Court after Allegedly Blowing $1M of their Inheritance, New York Post, May 8, 2013.

Adoption at Retirement

Recently, New York Times reported there is a growing number of retirees that have decided instead of relaxing during retirement to become parents. More specifically, retired people have turned to adoption. For some retirees this is their second go around at parenting, but for others this is their first time. Some of the retired individuals reason they will be successful parents because of their life experiences and accumulated knowledge. The adoptions are not only for infants,but also include adults. 

See Morgan Yuan, Growing Trend Sees Older Adults Choosing Parenthood At Retirement, Wealth Strategies Journal, May 15, 2013.

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

Man Dies in Court Fighting Wrongful Foreclosure, Wells Fargo Now Being Sued for Wrongful Death

On December 19, 2012, Larry Delassus, 62, died of heart disease during a court hearing at which he was fighting Wells Fargo’s wrongful foreclosure of his Hermosa Beach condominium.  Deborah Popovich, the estate administrator, is now suing the bank for wrongful death among other charges for forcing the ailing Delassus to needlessly appear in court.

The complaint states that Delassus always made timely mortgage and property tax payments, but Wells Fargo falsely claimed Delassus owed over $13,000 in back taxes, a bank error that really should have been attributed to his neighbor.  Wells Fargo then doubled Delassus’s mortgage payments and then foreclosed on his condo when he was unable to afford the higher payments.  Wells Fargo could have caught this mistake by “verifying his property’s tax identification number with the county” and still foreclosed “even after the county treasurer had confirmed that his property taxes were current and paid.”

Popovich claims that Delassus “succumbed to the pressure of fighting Wells Fargo and the heartbreak of losing his home” and that “Wells Fargo and its agents should be held accountable for their negligent wrongful and malicious actions.”

See Matt Reynolds, Elderly Man Allegedly Dies in Court Fighting Wells Fargo ‘Wrongful’ Foreclosure, AlterNet, May 14, 2013.

Public Guardian Investigated For Excessive Billing

Jeanan Mills Stuart, a Davidson County public guardian, is currently being investigated for billing her wards excessively. Her duty as a public guardian is to take over the financial affairs of people who are mentally or physically handicapped. Stuart has billed for more than 24 hours in one day and has gained over $270,000 dollars for doing small tasks like checking emails.The inquiry began when Stuart was charging over $200 an hour for doing non legal tasks. Experts have asserted that Stuart's billing for non legal tasks is not typical. A judge is currently evaluating Stuart's billing practices.

See Walter F. Roche Jr., Davidson County Public Guardian's Bills Exceed $1.8 Million ,The Tennessean, May 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.

Call For Judicial Body To Be Set Up To Protect Islamic Women

Recently, a group of Islamic women held a symposium entitled, "Women, Commercial Inheritance and Family Rule." Their symposium called for the establishement of a new judicial body designed to protect the inheritance rights of women in Saudi Arabia. The group hopes that this will ensure that inheritances are divided based upon the Islamic law not social tradition and pressure. One of these protections would be the right to a speedy inheritance inventory to ensure that the process would not last for years and decades. The denial of an inheritance is one the primary reasons that families feud in Saudi Arabia. Inheritance is a sentitive issue in their society because it is often confused with tribal tradition. Tribal tradition often overlooks women's rights as stated in the Qur'an and usually occurs when as a product of social pressure from male heirs. Many times, women are unlawfully persuaded by their male siblings to give up their inheritance rights. As a result, "thousands of cases related to inheritance disputes" are pending in the courts. Thus, the symposium called upon leaders, both legal and spiritual, to solve this problem.

See Damman, Call For Setting Up Judicial Body To Protect Female Inheritance, Arab News, May 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.

Court Orders Widow To Pay Her Late-Husband's Mistress

Anthony Francis Bohm died in mid-2010 from a heart attack. When he died, he left his entire estate to his estranged wife, Winifred Bohm. The two separated in 1993. In 1996, Mr. Bohm started living with his girlfriend, Dee Morgan. In 1999, they separated after Mr. Bohm refused to divorce his estranged wife. While there relationship ended, they continued to enjoy each others company as if their relationship never ended. 

Recently, the New South Wales Supreme Court held while Mr. Bohm ended the relationship with Ms. Morgan, he continued treat her as if they were still in a relationship. The court reasoned that "his conduct after that point in time led the plaintiff to believe that there was still a continuous relationship of a lesser intensity than that which existed before." Because of this continuous relationship, the court ordered Ms. Bohm to pay a "'legacy'" of $A225,000 from her late-husband's estate to Ms. Morgan. Associate Justice Richard Macready also ordered the court to pay $A250,000 from Mr. Bohm's estate.

See NZ Newswire, Widow Ordered To Pay Husband's Mistress, Yahoo! News, Apr. 21, 2013.

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

The Convention on the Right of Those With Mental Disabilities and the Future of Guardianship Law

In many nations around the world, guardianship proceedings equal to "civil death" because they often completely strip the rights of the person being placed under a guardianship. Unfortunately, in many nations, there are no procedural safeguards to protect those who are being placed within guardianships. That could change soon. Recently, the United Nation's ratified the Convention on the Rights of Persons with Disabilities (CRPD), which could change the scope of the international human rights law with as it applies to those with disabilities. 

See Michael Perlin, “Striking for the Guardians and Protectors of the Mind”: The Convention on the Rights of Persons with Mental Disabilities and the Future of Guardianship Law, 117 Penn St. L. Rev. 1159 (2013).

Special thanks to Katherine Pearson (Professor of Law, Penn State University - The Dickinson School of Law) for bringing this article to my attention.

Rhode Island authorizes same-sex marriages effective August 1, 2013

On May 2, 2013, the governor of Rhode Island, Lincoln Chafee, signed legislation permitting same-sex marriages.  When the law takes effect on August 1, 2013, Rhode Island will become the tenth state where same-sex couples may legally marry.

See Same-sex marriage becomes legal in Rhode Island, CBSNews.com, May 2, 2013.

Superboy Belongs to DC Comics

As I have previously discussed, there has been an ongoing legal battle between the heirs of the creator of superman and DC Comics. The battle now includes who holds the rights to Superboy and the 1938 ads that included the first Superman appearance. Recently, a federal court judge granted summary judgement in DC's favor. The judge rejected the argument that the heirs made to reclaim the work. In 1938, the rights to Superman were sold for $130.

However, the heirs have tried to make use of the Copyright Act of 1976 which permits the heirs the ability to negotiate a better deal or reclaim work that the creator turned over to someone else. Jerome Siegal proposed Superboy in 1938 and later DC published Superboy without Siegal's consent. A 9th circuit court judge held that Siegal's heirs settlement discussions with DC created an enforceable contract that included the Superboy character although not mentioned directly. The contract was a termination notice. The judge stated that the heirs most certainly used the Superboy as leverage when coming to an agreement. The heirs contested the agreement claiming it was not a contract just a rejected draft.

See Ted Johnson, Judge Rules DC Comics Holds Rights to Superboy,1938 Superman Ads , Variety, Apr. 18, 2013.

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

T.J. Jackson Awarded Financial Support

As I have previously discussed, T.J. Jackson filed a motion with a court asking for a reasonable amount of financial compensation for taking care of Jackson's children temporarily. Now, a California judge has approved the motion and held that T.J. should receive financial compensation for taking care of Jackson's children. A judge approved his request to receive $9,000 a month in parental support. The judge reasoned that this was appropriate because the services that T.J. provides are beneficial to the children and "'...it is in their best interests that he continue to do so.'"

See Michael Jackson - T.j. Michael Jackson Awarded Financial Support As Co-guardian of King of Pop's Kids, Contact Music, Apr. 19, 2013.

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

Bad Planning the FAPT Case

As I have previously discussed, problems have emerged for Arline Grant, whose husband established two Foreign Asset Protection Trusts to shield their assets from creditors. These trusts are usually established with a foreign trustee for the benefit of a United States grantor and their family members. Typically within this scheme, the trustee has discretion over the distributions that it gives to the beneficiaries. The grantor of the trust, however, usually retains the discretion to alter the trustee. This is usually how the grantor retains control over the trust. Current events have shown us that this scheme might lead to some unfortunate consequences. These consequences are a direct result of poor estate planning.

In United States v. Grant, a federal district court in the Southern District of Florida has ordered Arline Grant to exercise her authority to alter the trustee in this case. Before the court order, the trustee was a foreign corporation and therefore outside of the jurisdiction of the federal courts. The court has ordered her to replace the foreign trustee with a U.S. trustee to ensure that the trust would be within the reach of the jurisdiction of the courts. Now, the assets of the trust are reachable by the courts, which was contrary to the whole purpose of creating the trust. There are two points that should be taken away from this case. First, it might have been a better idea for the trust to limit who can be replaced as the trustee based on jurisdiction limitations. Second, it is never a good idea place assets that are outside the reach of the IRS. Often times, this can lead to criminal liability.

See Charles Rubin, Bad Planning In Foreign Asset Protection Trust Scenario, Rubin On Tax, Apr. 26, 2013.

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

State Gift and Estate Taxes Are Alive and Well

Even with the large federal unified credit, a taxpayer might still have to pay state estate taxes following their death. There are still 21 states with a state estate tax. The District of Columbia also imposes a state estate tax. The problem is that most of these do not have a large unified credit like at the federal level that excludes a good amount of income from taxation. For example, in New Jersey the exclusion limit is $675,000, in Rhode Island the limit is $910,725, and in New York the limit is $1 million. In each of these states, the top rate on income exceeding the exclusion is 16%.

remember, all of a person's assets are included in this amount. This could also include life insurance depending on who receives the policy and how the policy is owned. Furthermore, several states impose an inheritance tax, which is different from the estate tax. An inheritance tax is imposed on the beneficiaries after the distribution of property, with the exception of spouses is most states and children and relatives in some. The two states that impose an inheritance tax on Maryland and New Jersey. There are ways to reduce the amount that a person will pay in estate taxes. For example, a person could give deathbed gifts which are exactly what they sound. A person could technically give away enough money to decrease their estate to below the threshold amount, but that is not always the best. A better strategy might be to discuss things with an estate planning attorney in the person's state to figure out the best possible strategies. 

See Sandra Block, Retirement: State Estate Taxes Are Alive and Well, The Chicago Tribune, Apr. 16, 2013.

Why It Might Be Good Practice To Keep Your Tax Returns

Many people ask how long they should keep their tax returns. Some believe keeping your returns for 3-6 years is enough time. However, there are many reasons why you should at least keep an electronic copy of all of your tax returns. Below are some reasons why keeping your tax returns is a good idea. 

1. Your tax returns can be used as proof and protect your Retirement and Social Security benefits.
2. Protect yourself from audits.
3. Keeping better records will prevent any surprises regarding taxes owed or refunds due.
4. Sometimes insurance policies switch companies and the payout of a policy can be an issue. If you need to prove the payout amount, you can do that with a tax return.
5. Keeping your tax returns can greatly benefit your IRA and retirement plan contributions. Your state deduction may mean part of your contribution will not be taxable. Additionally, if you made non-deductible contributions for federal purposes it might mean the IRS may not tax part of your contribution.

See Eva Rosenberg, Never Throw Away Your Tax Returns Why You May Need Those Old 1040's Someday, MarketWatch.com, Apr. 22, 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.

The Rise in Dementia Cases and Cost

Recently, a study revealed the cost to care for people with dementia is comparable to the cost of caring for someone with cancer and could be higher. Over the next 30 years, the number of people with dementia will more than double. In 2010, over $109 billion was spent on dementia health care. According to the RAND study, in one year the cost to treat a person with dementia is about $41,000 to $56,000. The study used information collected over a ten-year period on 11,000 people from the Health and Retirement Study database. Many researchers are concerned that the country is not ready for the drastic increase in the number of people and the cost of dementia.

See Pam Belluck, Dementia Care Cost Is Projected to Double by 2040, The New York Times, Apr. 3, 2013.

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

Sex Change Did Not Dissolve Marriage

A woman from Michigan, Devon Pearl Burnett, married her husband in 1984. She lived with her husband until 2005, two years after he decided to undergo a gender reassignment surgery and become a woman. At the time Devon was suffering from dementia and so her children filed for divorce. Her husband, now named Bobbie Eliza Burnett, challenged the authority of their children to file for divorce on behalf of their mother. The children was the conservators of their mother who was incapacitated. 

The Michigan Court of Appeals affirmed the ruling of the lower court in Burnett v. Burnett. First, the court held that the conservator did have the authority to act on behalf of their ward. When that argument failed, Bobbie tried to argue that the courts lacked jurisdiction to hear the case because of Michigan's same-sex marriage laws. In Michigan, a marriage is defined as being between a man and woman; therefore, their marriage did not exist and by granting the divorce the court would inadvertently recognize the validity of the same-sex marriage. The courts rejected her arguments reasoning that the couple entered into a valid marriage contract before the sex change operation and that one spouse's unilateral decision to change gender could not end the marriage without the court's involvement.

See Jeff D. Gorman, Sex Change Didn't 'Magically Dissolve' Marriage, Courthouse News, Apr. 19, 2013.

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

More on the Interactive Account Manager From Google

As I have previously discussed, Google has taken a large step towards allowing its subscribers to determine what happens to their digital assets following their death. What has not been discussed is the fact that Google has built several safeguards into the program. The most important consideration that a person needs to make with the Interactive Account Manager is that the dashboard is not only for death event planning. The system will come into effect if the account is inactive for a period of time. In fact, the system was designed to only come into effect when a person's account has been inactive for a certain period of time. For Google, inactivity means death. This means that the protocol might go into effect if a person decides to travel for a period of time and does not use Google throughout that period of time. Fortunately, "Google will give you a one-month warning before pronouncing you departed and setting the system into action." Thus, if a person is planning a long journey, it is imperative that the person who is traveling has given Google a way to contact that person.

Furthermore, it is cannot be stressed how important this new feature might be for our posterity. The Internet has almost replaced actual letter writing in the modern age and so this could an excellent way to archive our person history in the modern era. This will also solve a current problem with family members not having access to a loved one's online assets following their loved one's death. 

See Kashmir Hill, Will You Use Google's Death Manager To Let Loved Ones Read Your Email When You Die?, Forbes, Apr. 11, 2013.

Financial Advisers Now Under The Scope

Some have called for stricter regulations of the methods that financial advisers use to report their credentials and their experience working with older Americans. Some “financial advisers use more than 50 different credentials, some of which they can simply buy online.” The large disparity between the different credentials have possibly left many older Americans confused, which could leave them open to abuse by unscrupulous advisers. For example, there is a considerable difference in the amount of education between an Accredited Retirement Advisor and an Accredited Estate Planner.

A recent study would like for both state and federal agencies to set standards for the amount of education that a person can have before they can obtain certain designations that would show that they have expertise in working with senior citizens. The report also recommended that both levels of agencies set rules of conduct for advisers on what designation advisers can claim. Furthermore, the report also asked for the creation of a tool that seniors would be able to use to determine exactly the credentials of an adviser and the training he or she has received. 

See Emily Stephenson, Financial Advisers’ Credentials Mislead Seniors, Watchdog Says, Hartford Courant, Apr. 18, 2013.

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

DC Comics Loses Attorney's Fees

As I have previously discussed, the creators of Superman, with their attorney Marc Toberoff, brought a suit against Warner Bros. hoping to terminate "a 1992 copyright grant agreement between Shuster's heirs and DC Comics." The ruling in that case meant that Warner Bros. could create new Superman films and other projects without the authorization of the creators. Warner Bros. was also successful in getting a 2008 agreement between itself and the Shuster and Siegel heir's because it violated copyright law.

To recuperate the attorney's fees that Warner Bros. lost defending the suit, the company and its subsidiary DC Comics, sued Toberoff for $500,000 in attorney's fees. A federal judge has ruled against Warner Bros. because it the motion felt like it contained a great amount of animus towards Toberoff. The judge also noted that DC Comics and Warner Bros. only targeted Toberoff, a non-party to the suit, and did not seek attorney's fees from the creators of Superman, the plaintiffs in the case. DC Comics argued that the reason that they did not seek punitive damages Shuster and Siegel's heirs was because they felt that they too were victims of Toberoff and his scheme to interfere with the copyright rights involving Superman. The judge disagreed DC Comics and argued that Toberoff and Pacific Pictures had the ability to explore a new area of copyright law. Furthermore, the judge concluded that Toberoff acted within the boundaries of reasonableness. In a different case, the judge also rejected DC Comics claim that Toberoff and Shuster tortuously interfered with their rights.

See Elizabeth Warmerdam, DC Comics Loses Pair of Rulings in Superman Saga, Courthouse News Service, Apr. 8, 2013.

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