Wills, Trusts & Estates Prof Blog

Auction June 27th At Summit County Probate Court in Ohio

Over the past thirty years, Summit County Probate Court has accumulated items from the local probate offices. June 27th the probate court will be hosting an auction open to the public. Some of the auction items include: statutes, antique clocks, artwork, oak desks, and other furniture. The proceeds will be used for some much needed court improvements. Some of the items on the improvement list are replacing the carpet, and signage. The address of where the auction will take place is 209 S. High Street, Akron, OH. The preview begins at 4 p.m. and the auction begins at 5 p.m. An inventory of all auction items can be viewed at www.youngsauctionservice.com.  

See Summit County Probate Court Auction June 27, Hudson Hub Times, Jun. 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.

Human Avatar Project Could Be Gradually Phased In By 2045

Millionaire Dmitry Itskov, has updated the latest robotic technology in human avatars. These life like avatars would have the contents of a real brain uploaded to it. Itskov believes that this technology can be gradually transitioned by 2045. Many investors are trying to invest Itskov’s human avatar project. Elderly people can start investing right now in the avatar b project, which is expected to be complete within the next 7 years. This project is specifically for elderly people who may not be around in 2045. Recently, doctors in the field held a conference called “Global Future 2045 Congress." The purpose of the conference was to work out details for the creation of the human avatar. 

See Bob Pisani, Immortality by 2035?, CNBS, Jun. 14, 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.

Anthony Marshall Headed to Prison

As I have previously discussed, Anthony Marshall remained free on bail as he appealed his 2009 conviction for forging mother Brooke Astor’s signature on a will and bilking millions from her estate. 

On June 7, the Court of Appeals in Albany denied the appeal.  Marshall and his lawyer, codefendant Francis Morrissey, must now surrender on June 17 for a one to three year prison term.  Marshall, now 88 and confined to a wheelchair, still insists he is innocent.

See Barbara Ross & Ginger Adams Otis, Brooke Astor’s Octogenarian Son Loses Last-Ditch Attempt to Avoid Prison, New York Daily News, June 10, 2013.

John Berry Wild's Son Removed As Trustee to the Family Trust

John Berry Wild died leaving behind a legacy worth millions. In 2009, Wild created a family trust leaving his assets to his wife, son, daughter and six grandchildren. The trust was set up to be tax efficient. WJ Wild Group Ltd, worth £2.3 million, was property of the family trust and was supposed to be split four ways. Wild hoped the trust set up would prevent family discord and substantial tax bills. However, after Wild’s death his son brought his mother to court because he believed she was going to disinherit him. The court heard about the 'long-standing animosity' between the mother and son. Because of the disagreements, the son, who was one of the trustees to the trust, refused to pay his mother £500,000 (her share) of Wild’s money. The court ruled that the son had been unduly influenced and should be removed from his duty as trustee and that the funds immediately be released to Wild’s widow. 

See Harriet Arkell, Family Torn Apart Over Father's £2.3 Million Inheritance Row After Son Accuses Mother of Writing Him Out of Her Will, Dailymail.co.uk, Jun. 10, 2013.

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

South Dakota Supreme Court Revoked Disclaimer Used To Obtain Medicaid

The Supreme Court of South Dakota ruled that a son could not withhold assets from his mother suffering from dementia for Medicaid purposes. In 2008, Arline Shipman was moved to a nursing home because of her dementia. However, social services revoked Arline’s admission to a nursing home due to her resources. It was only after Eugene, Arline’s husband, paid out over $100,000 in nursing home health care costs that Arline became eligible for long term Medicaid aid.

Due to the substantial amount of money spent on nursing home costs, Arline’s husband disinherited her from his will. Arline’s attorney drafted a document disclaiming any inheritance from Eugene. After Eugene’s death, Arline’s guardian ad litem petitioned the court for half of his estate citing South Dakota law.   

In Shipman v. South Dakota, the court held that Arline was entitled to receive half of the estate because it was her elective share, not fulfilled by the spousal support for her nursing home care. Moreover, the court revoked the disclaimer stating it would be in Arline’s best interest and that the beneficiaries under the will would not be prejudiced. The court reasoned that the disclaimer was being used as an estate-planning tool to obtain Medicaid.

See Jeff D. Gorman, Widow With Dementia Must Get Inheritance, Courthouse News, Jun. 12, 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.

Leo Blair's Estate Is Left To His Children

Millionaire Tony Blair has received an £80,000 inheritance from his father’s will. Blair’s Father, Leo Blair, left an estate valued at £295,000. His will splits the estate to his three children leaving an additional £50,000 to his unmarried daughter. Tony and Leo shared a very close relationship. In fact, Blair named his youngest son after his father. Leo has left quite the legacy, Tony is a successful business chief advisor and is one of the highest paid speakers. His real estate assets are valued at £21million.

See Millionaire Tony Blair Left £80,000 in the Will of His Father Who Died Last Year, Dailymail.co.uk, Jun. 8, 2013.

IRS Will Require Updated Employer Identification Numbers

Taxpayers will be expected to do some self-reporting to the IRS in 2014. Recently, the IRS is requiring everyone with an employer identification number to supply certain updated information. This regulation will become effective in 2014. The updated employer identification number is expected to help avoid tax delays and solve tax issues. The IRS will issue a new employer identification number form with a deadline attached. Folks with outdated information will have a 60 day time frame to make corrections after the regulation is put into effect.  

See Lisa Roberts- Mamone, Required Updates for Entity- Assigned EINs, Wealth Planning Examiner, Jun. 5, 2013.

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

Kansas State Files Summary Judgment Motion in Craigslist Sperm Donor Case

As I have previously discussed, the state of Kansas asserts William Marotta owes child support to the 3-year-old daughter of two women who enlisted Marotta through Criagslist to provide sperm for the couple. The state is seeking a summary judgment from the court. Lead co-counsel for the state, argued the contract that Marotta signed terminating his parental rights when he donated the sperm was invalid because a Kansas law requires a licensed physician to perform the artificial insemination in sperm donor cases which was not done here. Benoit Swinnen is the attorney representing Marotta. Mary Mattivi, the judge hearing the case has appointed attorney Jennifer Berger to represent Schreiner. M. Jill Dykes was appointed as guardian ad litem to represent the child’s best interests.

See Tim Hrenchir, State Seeks Summary Judgment in Sperm Donor Case, The Topeka Capital-Journal, May 28, 2013.

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

Fate of Taiwanese Billionaire’s Fortune Uncertain

Taiwanese business icon, Y.C. Wang, passed away in 2008 at age 91 worth an estimated $6.8 billion.  Leaving no will, the manufacturing titan died with one wife, nine children with two other women, and three children from another woman also claiming he’s their father.

Wang’s eldest son, Winston Wong, has “asked a Bermuda court to void an ‘unlawful’ transfer of assets currently worth $15 billion into four offshore trusts said to be established in secret by a minority of Y.C. Wang’s family without his father’s consent.” 

The battle concerning his estate isn’t just about Wang’s fortune. Offshore shares of the Formosa Plastics Group could determine control of the company.  Also, Wang’s heirs are U.S. citizens so Taiwanese and American tax authorities should be interested in whether the overseas trusts belong in Wang’s estate.

See Russell Flannery,Taiwan’s Missing $15 Billion Fortune?, Forbes, May 29, 2013.

Florida Court Dismissed Suit Claiming that Florida Statute Abolished Common Law Right

Louis Steinmetz is the beneficiary of a spendthrift trust worth millions. Wells Fargo is the trustee of the trust. If the trust distribution would be accessible to creditors, Steinmetz will not be able to receive distributions. Steinmetz secured a loan of $350,000 for an LLC. He was the personal guaranty on the loan. However, Stienmetz was unable to pay the loan and defaulted. As a result, Wells Fargo made no distribution to Steinmetz. The loan lender is suing Wells Fargo claiming that Florida state law violates the state constitution. Specifically, that the state law gets rid of the “common law” right to secure a judgment against any interest that the debtor has and provides no alternative.

In Robert Zlatkiss and Linda Zlatkiss v. All America Team Concepts, LLC. (5th Dist., Case No. 5D12-3324, May 31, 2013), the court held that the Florida state law did not get rid of the common law right. The court reasoned that spendthrift trusts were around long before the statute was enacted. Therefore, the court dismissed the suit. 

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

Woman Suspected of Forging a Marriage Certificate for Money

Allison Lear is suspected of forging a marriage certificate to keep her deceased’s boyfriend’s money and possessions after he died three years ago in Nevada. Lear was arrested at a hotel in Las Vegas for outstanding warrants. She is currently facing both forgery and perjury charges. Police have a couple of concerns with the alleged marriage. First, the minister that supposedly performed the marriage did not have a temporary permit. Second, the police cannot locate the witness of the purported ceremony that took place five days before Lear’s boyfriends death. 

See Police: Nev.Woman Faked Marriage to Dead, Independentmail.com, May 31, 2013.

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

Uniform Law Commission Helps Move Digital Asset Legislation

As I have previously discussed, privacy laws have made it difficult to access family members digital assets after death. Most of those assets are regulated by company service agreements. Recently, Virginia passed a law allowing parents to access social accounts such as Facebook. However, most states have not passed laws about digital assets. In fact, only five states have enacted laws about digital assets at all.

The Uniform Law Commission (ULC), helps normalize laws across states. The ULC developed a committee dedicated to digital assets to develop consistent laws and help bridge the gap with state probate laws. As a result, several states have begun to draft digital asset laws. Some companies are opposing this legislation because of their current users reliance on privacy agreements. A survey conducted by a security software company asked 3,000 people an average of their online assets. The average online asset worth was $55,000. Recently, I posted a revised version of my article, Estate Planning in the Digital Age that educates estates planning professionals on the importance for planning for the disposition of digital assets.

See Anne Hobson, The Digital Afterlife, Spectator.org, May 30, 2013.

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

Ohio Court Says Funeral Luncheon is a Reimbursable Expense

Lunch for mourners after a funeral is typical in many traditions. Recently, an Ohio court decided if lunch following a funeral was a reimbursable expense. In 2011, Kathy Campbell died. Her will appointed Joan Torzewski as the executrix of the estate. Campbell’s will indicated that all funeral expenses should be paid out of her estate. Joan’s siblings were reimbursed $1,800 dollars for a funeral luncheon they had paid out of pocket for. Joan claimed that the lunch was a critical part of the funeral ceremony because of Polish tradition. The reimbursement was challenged. 

In re Estate of Kathy M. Campbell, a case of first impression, the Ohio intermediate appellate court held that the cost for a funeral luncheon is a reimbursable funeral expense under the Ohio law. The court reasoned that under the Ohio Revised Code 2117.25  the lunch was not excluded from being considered a funeral expense. Additionally, the lunch was a reasonably incurred expense because people ordinarily include a luncheon following a burial.

In re Estate of Kathy M. Campbell, No. WD-12-028, 2013 WL 1385635 (Ohio Ct. App. Apr. 5, 2013).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

A Surviving Spouse is a Necessary Party to a Will Contest

When Virgil Becker died his will gave his entire estate to his youngest daughter by his second marriage. Becker's will left nothing to his widow, his ex-spouse, or his daughters by the ex-spouse. Washington law provides rules for judicial and nonjudicial settlements of estate contests and define interested parties to include all those beneficially interested in the estate.  

In re Estate of Becker, the Washington Supreme Court held that a surviving spouse who is not a beneficiary of the will of his or her deceased spouse is a necessary party to the settlement of a will contest because if the will is invalid, the surviving spouse would receive half the probate estate either through in intestacy or the omitted spouse statute.

In re Estate of Becker, 298 P.3d 720 (Wash. 2013)

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

Two Largest Funeral Home Operators Merge

Recently, the two largest funeral home operators, Service Corp. International and Stewart Enterprises Inc. have merged. Because of the baby boomer generation, this merger has been a long time coming. Service Corp. International paid just over a billion dollars for Stewart Enterprises Inc. Serv. Corp reported that the companies merger would have a $9 billion dollar revenue backlog. This backlog is a result from pre- planned bookings. Combined the operators own 1,653 funeral homes across 48 states, eight Canada provinces, and Puerto Rico. Shareholders are pleased with the 11% Increase in stock. 

See Chris Peters, Maju Samuel, and Ted Kerr, Top Two U.S. Funeral Companies Merge As Baby Boomers Boost Demand, Reuters, May 29, 2013.

Virginia Supreme Court Held Slayer Statute Incudes Persons With Mental Illness

As I have previously discussed, on December 7, 2009, Carolyn Osman died from strangulation. She left behind three kids all of which were beneficiaries to her estate. However, one of her sons Michael Osman caused her death. Osman suffered from paranoid schizophrenia and strangled his mother. He confessed to causing her death and was found not guilty by reason of insanity. 

In Osman v. Osman, the court held that a beneficiary found not guilty by reason of insanity is disqualified under slayer’s statute. The Supreme Court of Virginia held that son was disqualified from taking a share of the decedent’s estate under Virginia’s slayer’s statute. 

Osman v. Osman, 737 S.E.2d 879 (Va. 2013).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

Vermont Bill Aims To Substantiate Elder Abuse Claims

Last year, Vermont governor Shumlin vetoed a bill that required the Agency of Human Services (AHS) to send monthly updates on how it responds to elder abuse reports. He reasoned it was an undue burden on the agency. This legislative session both the Senate and the House have proposed a bill similar to the one vetoed by the governor. However, this one has removed some of the more difficult and tedious reporting requirements. The bill highlights a huge problem of elder abuse, which has been on the rise in recent years. One of the goals of the bill is to figure out why reports of elder abuse are not followed up with. The national average in substantiating elder abuse claims is 42%. However, in Vermont elder abuse claims are only 14% substantiated. Missing from the new bill is the $75,000 budget to hire an independent evaluator to assess the Adult Protective Services processes.

See Alicia Freese, Shumlin Expected to Sign Watered-Down Elder Abuse Bill, VT Digger, May 22, 2013.

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

Supreme Court Ruling Reminds People To Update Beneficiary Forms

Recently, the U.S. Supreme Court emphasised the importance of keeping up with your beneficiary designation form. In 2008, Warren Hillman died. He had a insurance policy valued at $124,558.03 that his ex wife Judy Maretta, and current wife were fighting over.

In Hillman v. Maretta, The Supreme Court held that Judy Maretta was entitled to all of the insurance proceeds.The court stated that the beneficiary designation form was not updated after Hillman was diagnosed with leukemia. Some states have laws protecting spouses from these types of mistakes. Even though Virginia does have this protective statue, the life insurance policy was part of a program for federal employees. The Federal Employee's Group Life Insurance Act of 1954 regulates these policies. The act indicated that the proceeds must be paid according to the beneficiary designation form. If the policy holder does not have one the policy is paid out through intestacy. The Supreme Court ruled that the act preempts the Virgina state law that protects spouses from these mistakes.

See Deborah L. Jacobs, Supreme Court Favors Ex-Wife Over Widow In Battle For Life Insurance Proceeds, Forbes, Jun. 3, 2013.

Unrecoverable Legal Malpractice Claim

The Kansas Supreme Court recently heard a case about legal malpractice resulting in excessive estate tax liability. The testator secured an attorney to draft a will and other documents. After the testator died, her estate was valued at $39.5 million. However, the estate taxes owed on the estate were almost $22 million. The personal representative brought an action against the decedent’s attorney and others alleging negligence, breach of fiduciary duty, and breach of contract resulting in payment of estate taxes that could have been minimized by proper planning.   

In Jeanes v. Bank of America, the court held that because the cause of action accrued at the decedent’s death, it could not qualify as a survival claim and therefore could not be pursued by the personal representative. Therefore, the claim for legal malpractice is not recoverable.

Jeanes v. Bank of America, NA, 295 P.3d 1045 (Kan. 2013).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.