Wills, Trusts & Estates Prof Blog

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

Monday, February 19, 2018

Fixing Outdated Irrevocable Trusts

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-19/d784c1f6-8c9a-45e6-9b6e-c84581ca41eb.pngEstate planners now meeting with clients to review their outdated estate plans commonly come across irrevocable trusts set up by those clients in the 1980s, 90s, or early 2000s. Many of these trusts were established at a time when the estate and gift tax exemption thresholds were much lower and affected a larger group of taxpayers. The point of creating these trusts was to lower the size of a client’s estate in order to avoid as much estate and gift tax as possible. Under the current tax law, these trusts are no longer as necessary and may even be detrimental to an estate plan. In Wisconsin, changes to the Wisconsin Trust Code provide more options for planners and clients to modify or terminate these irrevocable trusts.

See Jacqueline L. Messer, Fixing Outdated Irrevocable Trusts, Milwaukee Business Journal, February 5, 2018.

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

February 19, 2018 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Sunday, February 18, 2018

Woman Who Was Mistakenly ‘BURIED ALIVE’ Tried to Fight ‘Her Way out of Sealed Coffin’ After Being Laid to Rest 11 Days Before

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-18/7ac9238d-8d54-4a59-bc6f-008c8ea98340.pngRosangela Almeida dos Santos suffered from cardiac arrest in late January and passed away after being rushed to the Hospital do Oeste in Barreiras, a city in eastern Brazil. Her family held a wake in her honor that night and her body was buried the following day in a concrete coffin. Soon after, locals started reporting screams, moans, and groans coming from the tomb. Natalina Silva, a local resident who heard noises coming from the supposedly deceased Santos stated: “When I got there right in front of the tomb, I heard banging from inside it. I thought the kids who play around the cemetery were playing a joke on me. Then I heard her groan twice, and after those two groans she stopped.” Eleven days after her burial, family members attempted to save Santos. When they managed to reach the coffin, they noticed the nails surrounding the lid had been pushed outward and there was blood and scratches inside. The family reported the incident to the police and a spokesman from the hospital said they will “provide all necessary information requested from them to the family and authorities.”

See Matt Roper, Woman Who Was Mistakenly ‘BURIED ALIVE’ Tried to Fight ‘Her Way out of Sealed Coffin’ After Being Laid to Rest 11 Days Before, DailyMail.com, February 16, 2018.

Special thanks to Molly Neace for bringing this article to my attention.

 

February 18, 2018 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Friday, February 16, 2018

John Mahoney, Who Played Cranky Dad on ‘Frasier,’ Dies at 77

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-16/f7565de5-e100-4417-981d-b2d89789f8ce.pngJohn Mahoney, popularly known for his role as the gruff-but-lovable Martin Crane on the television series Frasier, died last week at the age of 77. Paul Martino, Mahoney’s manager for over 30 years, said the actor passed away after a brief stay in the hospital. The cause of death was not provided. Kelsey Grammer, who played Frasier Crane, Martin’s well-to-do and often arrogant son, said of Mahoney’s death: “He was my father. I loved him.”

Mahoney was born in 1940 after his pregnant mother’s evacuation to Blackpool, England. He later followed a sister to Chicago, where he fell in love with the city. In a 2015 interview, Mahoney highlighted his favorite attributes of the city he loved: “The lake, the skyline, the museums, the symphony, the lyric opera…my favorite place in the world.”

See Lynn Elber, John Mahoney, Who Played Cranky Dad on ‘Frasier,’ Dies at 77, USA Today, February 5, 2017.

February 16, 2018 in Current Events, Estate Planning - Generally, Television | Permalink | Comments (0)

Thursday, February 15, 2018

Forbes' First List of Cryptocurrency's Richest: Meet the Secretive Freaks, Geeks and Visionaries Minting Billions from Bitcoin Mania

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-14/fc15fd77-414b-4400-907a-9ba1033b9fd2.pngMatthew Mellon, a banking heir who saw his $2 million investment in XRP, Ripple's cryptocurrency, explode into a billion dollar fortune, learned first-hand the dangers associated with earning perceived easy money. The morning following a night of festivities at his Los Angles party pad, the 54-year-old says he discovered four individuals rooting around his home. Mellon did not file a report with police and guesses the unwanted intruders were after his XRP. Though they stole two cellphones and four laptops, they were not able to loot Mellon's cryto-fortune, which is carefully hidden in various locations. While not all of the individuals comprising Forbes's list of the most crytpo-affluent have such dramatic tales to tell, the incident serves to underscore the unique nature of both the crytocurrency boom and its beneficiaries. 

See Jeff Kauflin, Forbes' First List of Cryptocurrency's Richest: Meet the Secretive Freaks, Geeks and Visionaries Minting Billions from Bitcoin Mania, Forbes, February 7, 2018.

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

February 15, 2018 in Current Events, Estate Planning - Generally, Technology | Permalink | Comments (0)

IRAs and 401(k)s Are Safe from Judgments - For Now

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-13/ca73aba8-382d-4c3f-894d-6ff473dc0e73.pngA judgment debtor who confessed judgments in favor of a bank in excess of $100,000 failed to make any payment on the acknowledged debt. Following this failure to pay, the bank initiated proceedings to collect. In the course of these proceedings, the debtor confessed that he had made significant additions to his IRA, 401(k), and a 529 plan after the initial judgment. The total contribution to the three plans was approximately $92,000. The bank argued that these conveyances were fraudulent and subject to reversal and execution. When the Court of Appeals heard the case, considering only the transfers to the 401(k) and IRA, it held that the conveyances to the IRA and 401(k) were not subject to reversal after looking at the relevant statutes. The logical question following this holding is how far the opinion may be stretched to the detriment of the judgment creditor. Based on this court’s reasoning, a judgment debtor could feasibly purchase exempt property, like firearms or a home, with non-exempt assets like cash, thereby converting previously non-exempt assets into exempt assets.

See R. Bruce Wallace, IRAs and 401(k)s Are Safe from Judgments - For Now, Lexology, February 6, 2018.

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

February 15, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Wednesday, February 14, 2018

Woman Who Stabbed Husband While He Slept Can’t Get His Pension

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-13/e41ea57c-1832-40bf-851d-aa6d8fedd1cf.pngAn Illinois woman who stabbed her husband while he slept and then hit him with a baseball bat to prevent him from seeking help, later found not guilty by reason of insanity, is not entitled to receive her husband’s pension benefits. In a recent ruling, the Seventh Circuit argued that the Employee Retirement Income Security Act does not work to preempt state slayer statutes. The judges noted that the principle preventing murderers from harvesting the fruits of their bad act is “is a well-established legal principle which predates ERISA.” The woman’s mental instability at the time of the heinous crime was dismissed by the court as a non-issue based on a decision at the Illinois appellate court level. This particular case is of some note, as it represents a controversy that has not yet been addressed by the Supreme Court.

See Carmen Castro-Pagan, Woman Who Stabbed Husband While He Slept Can’t Get His Pension, Bloomberg, January 29, 2018.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

February 14, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Court Held That Trustee Had Authority to Sell Real Property and That the Beneficiaries Did Not Have a Right of First Refusal

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-13/53612c72-38f3-4635-9e78-fdc241fc6f05.pngIn the Estate of Rodriguez, the beneficiary of a testamentary trust filed suit against the trustee to prevent the sale of a ranch that made up the trust corpus. The court looked to the language of the trust for guidance as to the testator’s intent and based its holding on the testator’s varied use of precatory and mandatory terminology. Generally, words like “wish,” “desire,” “want,” and “request” are considered precatory language. They show that a testator or settlor would prefer something to happen but incorporate language soft enough that following the applicable provision is not a requirement. Language like “must” or “shall” is usually an indication of a mandatory provision.

The trust in Estate of Rodriguez read: “My Trustee can sell the corpus of this Trust, but it [is] my desire my ranch stay intact as long as it is reasonable.” The trust document also stated: “The Trustee during the continuation of each trust shall have the sole and complete right to possess, control, manage, and dispose of each trust estate and the said Trustee shall have the powers, rights, responsibilities and duties given to or imposed upon by trustees by the Texas Trust Code as such Code now exists.” The court held that the wording in the trust defining the scope of the trustee’s powers used mandatory language while the language evidencing the testator’s “desire” to keep the ranch intact was precatory. Given this, the court held that the trustee had complete discretion to sell the property and the beneficiary had no power prevent the sale.

See David Fowler Johnson, Court Held That Trustee Had Authority to Sell Real Property and That the Beneficiaries Did Not Have a Right of First Refusal, Texas Fiduciary Litigator, February 3, 2018.

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

 

February 14, 2018 in Current Events, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Mike Vick's Bankruptcy Case Officially Closed After Paying Back $17 Mil

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-13/7db292f9-ba05-4130-ba5d-b75fc52ee437.pngMichael Vick filed for Chapter 11 in 2008 after the now-infamous dog-fighting scandal hit headlines. His unsavory activities cost him a number of lucrative endorsement deals and his massive NFL salary. At the time, Vick owed Bank of America, the IRS, and BMW financial services over $17 million. Since his reinstatement with the Eagles, he has been working overtime to pay off these liabilities. This past November, he finally paid off his creditors and the bankruptcy judge officially close the case.

See Mike Vick's Bankruptcy Case Officially Closed After Paying Back $17 Mil, TMZ, February 12, 2018.

February 14, 2018 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Tuesday, February 13, 2018

Court Reverses Trial Court’s Order Denying an Application to Probate a Will As a Muniment of Title

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-13/8ed7df52-9677-4e9b-9ee6-70bfc385d50c.pngIn Ramirez v. Galvan, the probate court refused an application seeking the probate of a will as muniment of title. The reasoning behind the refusal was section 256.003(a) of the Texas Estates Code (TEC), which requires a will to be “submitted for probate within four years of the testator’s death.” This rule is not an absolute. A will may be probated after the four-year period as long as the proponent is not in default. Per TEC, “default” means a “failure to probate a will because of the absence of reasonable diligence by the party offering the instrument.” In the past, Texas courts have been relatively generous in their light enforcement of this provision. On appeal, the appellate court refused to uphold the lower court’s decision. The higher court said that the probate court’s “finding is so against the great weight and preponderance of the evidence so as to be clearly wrong and unjust.”

See David Fowler Johnson, Court Reverses Trial Court’s Order Denying an Application to Probate a Will As a Muniment of Title, Texas Fiduciary Litigator, February 3, 2018.

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

February 13, 2018 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

The ‘Curse’ of Winning the Lottery

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-12/ed8eb045-7a46-4436-aad8-84957ba5a165.pngMost of us have sat idly and dreamed of a day when the sweet greenbacks flow like the Nile in summer and the only money issue we have to consider is whether we can spend that cabbage fast enough. While our daydreams tend to be light and lovely, the reality of winning large sums of cash can be morbidly dark. For Abraham Shakespeare, a $30 million Florida lottery winner, his lucky break was a short-lived affair. After befriending a seemingly kind young woman who offered to help manage his finances, he was soon to discover she had more sinister intentions. Shakespeare’s body was discovered three years after he claimed his prize in a makeshift grave under a slab of concrete. The young lady who had been so eager to lend her assistance had murdered him for the money. She was found and eventually sentenced to life in prison.

There are many anecdotes detailing these fortune-to-murder stories with equally unpleasant conclusions; some lucky lottery winner cashes in for millions and is found dead months or years later, their life snuffed out because someone desperately wanted their wealth. This sinister phenomenon has become increasingly well known, so common in fact that such tales have prompted the winner of last month’s $559.7 million lottery jackpot, a New Hampshire woman, to refuse to claim her prize unless she is granted anonymity. Edward Ugel, author of “Money for Nothing: One Man's Journey Through the Dark Side of Lottery Millions,” has said that of the “thousands of lottery winners I knew, a few were happy and a few lived happily ever after. “But you would be blown away to see how many winners wish they'd never won.”

See Christopher Carbone, The ‘Curse’ of Winning the Lottery, Fox News, February 7, 2018.

February 13, 2018 in Current Events, Estate Planning - Generally | Permalink | Comments (1)