Wills, Trusts & Estates Prof Blog

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

Thursday, February 22, 2018

Prince's Heirs Worried Estate's Burning Cash Will Leave Them with Nothing

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-22/e5a4b142-e1e1-4737-8d92-bbda00d1b62d.pngPrince’s heirs are growing concerned that they will be left with nothing once the estate is finally settled. Comerica is currently handling the estate's disposition and charges $125,000 per month for their services. Comerica has also hired a law firm, Fredrikson & Byron, P.A., to advise on tax issues, coordinate with accountants, and to represent the estate in court. In the month of November alone, the law firm’s bill was in excess of $440,000 in expenses and fees. With these incredibly high costs, over $600,000 in some months, Prince’s heirs and beneficiaries are worried that the estate will be drained by the time any assets are distributed. Comerica has been diligent in their record-keeping though; the company has itemized the necessary expenses in a 600-page document that details how they are spending the money in Prince’s $250 million estate.

See Prince's Heirs Worried Estate's Burning Cash Will Leave Them with Nothing, TMZ, February 22, 2108.

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

February 22, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0)

Wednesday, February 21, 2018

Book on McGovern & Hirsch California Probate Code Annotated, 2018 ed. (California Desktop Codes)

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-21/6da01281-507e-479b-8f29-6411a8a8a3fb.pngAdam J Hirsch & William M. McGovern, Jr. recently published a book entitled, McGovern & Hirsch California Probate Code Annotated, 2018 ed. (California Desktop Codes) (2018). Provided below is some information about the book:

Your comprehensive resource for probate law and estate planning in California, McGovern & Hirsch California Probate Code Annotated provides the complete text of the California Probate Code, related state and federal statutes, and rules of court regarding estate planning and probate.

This volume contains:

  • Authoritative commentary, annotations, and analysis of leading cases
  • Law Revision Commission editorial notes that provide additional guidance in the construction and application of particular sections
  • References to Witkin's Summary of California Law, 10th which direct you toward further research
  • A table of Judicial Council forms to help you identify forms to be used in conjunction with the statutes and rules
  • A table of cases illustrating the cases discussed in the author's commentary
  • A table of affected sections indicating recent modifications
  • Underlining to indicate additions or changes in statutes
  • Asterisks to indicate deletions

February 21, 2018 in Books, Books - For Practitioners, Books - For the Classroom, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Article on Implicaciones Fiscales De La Legítima Catalana (Tax Implications of the Catalan Forced Heirship Institution)

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-20/c41b7e8a-36ef-4210-8f8c-b660d7b7a456.pngAlberto Artamendi Gutiérrez recently posted an Article entitled, Implicaciones Fiscales De La Legítima Catalana (Tax Implications of the Catalan Forced Heirship Institution), Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article:

Spanish Abstract: Tal como establece el artículo 451-1 del Código Civil de Cataluña, "La legítima confiere a determinadas personas el derecho a obtener en la sucesión del causante un valor patrimonial que este puede atribuir a título de institución hereditaria, legado, atribución particular o donación, o de cualquier otra manera". Así pues, la legítima catalana se configura como un derecho de crédito de ciertos parientes contra los herederos del causante, lo que contrasta con la regulación del resto de España, donde el Código Civil, en su artículo 806, establece que la legítima es un derecho sobre los bienes de la herencia: "Legítima es la porción de bien de que el testador no puede disponía miedo haberla reservado la ley a determinados herederos, llamados por esto herederos forzosos".

Esta diferente aproximación al concepto puede parecer banal en un primer análisis, pero lo cierto es que las consecuencias del diferente tratamiento son amplias y profundas, y hay que decir que, tal vez por el reducido ámbito personal y territorial de aplicación - los ciudadanos españoles con vecindad civil catalán - o por la relativa novedad y desconocimiento de esta institución (el libro cuarto del Código civil de Cataluña entró en vigor el 1 enero 2009, si bien esta institución ya existía antes con diferente configuración e implicaciones jurídicas) éstas no han sido previstas en absoluto por la normativa tributaria, dando lugar a situaciones difíciles de resolver.

Por este motivo, el presente artículo analizará esta institución desde el punto de vista tributario, intentando ordenar las escasas guías normativas, doctrinales y jurisprudenciales que existen y proponiendo soluciones para las lagunas legales que todavía hay.


English Abstract: Article 451-1 of the Catalan civil code establishes a right of certain relatives to receive certain economic value from the succession of a person. This right, called “legítima” is therefore a credit right of certain relatives against the heir of a deceased person. In the rest of Spain, there is also a “legítima”, but as a direct right against the assets of the deceased person, as another heir (article 806 of the Spanish civil code).

This different configuration of the right can look trivial at first glance, but the legal consequences of these two “legítimas” differ widely and one could argue that these different consequences have not been covered whatsoever in the Spanish tax law, giving rise to situations that are very difficult to solve. This lack of regulation might be due to its small personal and territorial sphere of application (the Spanish citizens with civil residence in Catalonia) or the fact that this is a relatively new and unknown institution (the catalan “legítima” was introduced on 1 January 2009, although the institution already existed prior to this date with a different configuration and legal consequences.

This article analyzes the catalan “legítima” from a Spanish tax point of view, trying to put together the scarce existing regulation and case law and proposing legal solutions for the loopholes that still surround this particular institution.

February 21, 2018 in Articles, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Tuesday, February 20, 2018

Before There Was #MeToo, There Was Mary Cunningham

Merlin_133384214_67ca0c08-73f9-467c-ad90-3c6f4d9b5a77-blog427Mary Cunningham Agee is lovingly known as the “Tomato Lady” in her tightknit community of St. Helena, California. She patiently grows heirlooms and graciously hands these out to neighbors along with an assortment of cabbage, cauliflower, and basil. Each side of her picturesque 4,000-square-foot home is lined with vineyards that are cultivated each season to produce twenty-five cases of a delightful pinot noir.

This sunshine-and-roses scene, while pretty on the surface, offers a pleasant, but shallow façade for Agee’s current troubles. Ms. Agee’s husband of 35 years, Richard Agee, a former CEO of Bendix and once considered to be a rising corporate star, died this past December. In the last few, mentally troubled weeks of his life, he revised his will to include his previously estranged children and initiated divorce proceeds against Ms. Agee. Due to these last-minute changes, her days are now filled with a contentious legal battle involving Mr. Agee’s children and a will that was arguably written while Mr. Agee was not of sound mind. This recent twist is but a single piece of a turbulent epic that stretches back nearly four decades, to what is arguably the first widely-followed sex scandal in corporate America.

See Amy Chozick, Before There Was #MeToo, There Was Mary Cunningham, The New York Times, February 10, 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 20, 2018 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Monday, February 19, 2018

Linda Kotis: Your Heirs May Find Your Single Member LLC Taxing

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-19/99a2ff55-88db-4fca-80e6-3ad45606a144.pngLinda Kotis recently published an Article entitled, Linda Kotis: Your Heirs May Find Your Single Member LLC Taxing, Wealth Strategies Journal (2018). Provided below is an abstract of the Article:

I. SMLLC Scenario and Potential Consequences
Archie and Edith were married for 50 years. After Archie’s death, Edith sold their home in Queens, New York for a tidy profit. Archie also named his wife as the beneficiary of a large insurance policy he bought when he first started working at the loading dock. Edith’s financial advisor recommended that she invest the gain from the sale of her home along with the insurance proceeds in a Manhattan duplex. Edith wasn’t interested in staying in New York, so about five years ago she moved to Arlington, Virginia to be closer to cousins on Archie’s side of the family. The duplex is currently owned by a New York single member limited liability company (“SMLLC”). Gloria and Mike, her daughter and son-in-law, live in one of the property’s units, and her grandson, Joey, lives in the other. Each family pays rent to the SMLLC for its unit. The current value of the duplex is $6.5 million.

Edith was advised to create the SMLLC to avoid ancillary probate and New York state estate tax. Unfortunately, the SMLLC may not accomplish either of those purposes. Edith is looking at her estate plan again and wants to know what will happen to the SMLLC at her death.

This SMLLC may create costly and unintended consequences for Edith’s estate. Depending on the duplex’s value, there may be a New York State (NYS) estate tax liability. Even if no estate tax is due, the estate may still have to file a NYS estate tax return. This is a complex task which raises the cost of estate administration and could have been avoided. Furthermore, filing the NYS estate tax return requires submission of information to New York tax authorities that may trigger inquiries into Edith’s residency status. Ancillary probate may be required if the death of Edith as the sole member causes the dissolution of the LLC. This also adds to the burden of estate administration, both increasing time and cost.

This article will: (i) review taxation of limited liability companies at the federal and state levels; (ii) address treatment of a SMLLC for nonresident New York estate tax purposes; (iii) discuss ancillary probate and estate administration; and (iv) offer potential solutions to minimize potential state estate tax liability and burdens of estate administration.

February 19, 2018 in Estate Administration, Estate Planning - Generally, Estate Tax, 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)

Why Is James Brown’s Estate Still Unsettled? Ask the Lawyers

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-12/e0461b2a-415e-4890-a460-a5536f189336.pngJames Brown, the King of Soul, tragically passed away on Christmas Day, 2006. Since his death, over a dozen lawsuits have been filed relating to the disposition of his estate. Brown’s carefully crafted estate plan originally sought to provide millions of dollars to underprivileged children in South Carolina and Georgia. To this day, eleven years after his death, not one intended beneficiary of his will has seen a single penny. Part of the problem with settling the estate stems from a dispute between Brown’s children and grandchildren and his spouse, Tommie Rae Hynie. The grandchildren and children are alleging that Hynie has engaged in illegal, behind-the-scene dealings with the estate involving copyrights for a number of songs Brown wrote. Another issue is Hynie’s status as Brown’s legitimate heir. There is some evidence indicating that Hynie was married to another man in 2001, the year she was wedded to Brown. Marc Toberoff, an attorney for the grandchildren and children, stated that Brown’s estate “has long been marred by dubious back-room dealings between the Estate and James Brown’s putative wife, Tommie Rae Hynie, as described in our lawsuit.” However this issue is eventually settled, it looks as though the needy children in Georgia and South Carolina will have to wait for aid until Brown’s family settles their disputes against his estate.

See Steve Knopper Why Is James Brown’s Estate Still Unsettled? Ask the Lawyers, The New York Times, February 4, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

February 13, 2018 in Death Event Planning, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Sunday, February 11, 2018

Estate of Grey Gardens Socialite Sues for the Return of a Long-lost Portrait of 19-year-old Jackie Kennedy That Was Found Hidden Away in a Hamptons Art Gallery

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-11/577101c4-94da-48a3-a326-3c112804cafc.pngJackie Kennedy’s father commissioned a portrait of his daughter after a horse-riding accident that left the then-19-year-old unconscious for several days. The painting was commissioned in 1950 but was only recently discovered. It is believed the portrait was stolen from Grey Gardens, a now-dilapidated estate belonging to Kennedy’s cousin and aunt. The estate is currently seeking the return of the painting and have filed suit. Terry Wallace, the suit’s target, dismissed the estate’s claims: “I got the painting 30 years ago from a very reputable art and antiques dealer. I can't give you the name, but I can only tell you they were reputable. They were in the Hamptons and the painting came with a very good title. It has a very good provenance.”

See Estate of Grey Gardens Socialite Sues for the Return of a Long-lost Portrait of 19-year-old Jackie Kennedy That Was Found Hidden Away in a Hamptons Art Gallery, Daily Mail.com, February 10, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

February 11, 2018 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, February 8, 2018

What’s Going to Happen To Ikea Founder’s Billions?

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-08/515c5d42-6c9e-4326-9fee-2c6e548e6a69.pngIngvar Kamprad, founder of Ikea, died January 31st at the age of 91. Bloomberg’s Billionaires Index listed him as one of the ten wealthiest men in the world. Kamprad disputed his place on the list as Ikea, the world’s largest furniture seller, was controlled via a network of holding companies and foundations and not directly by Kamprad himself. His heirs will not be beneficiaries to the Ikea fortune and will not have any control over the firm. The structure put in place decades ago by Kamprad was designed to keep control of the company outside his family in order to better ensure its semi-charitable mission.

See Devon Pendleton, What’s Going to Happen To Ikea Founder’s Billions?, Bloomberg, January 31, 2018.

February 8, 2018 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Tuesday, February 6, 2018

Article on Distributive Justice and Donative Intent

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-06/2f1a19d2-8482-4d53-a9d6-8347307f42a3.pngAlexander A. Boni-Saenz recently posted an Article entitled, Distributive Justice and Donative Intent, Elder Law Studies eJournal (2017). Provided below is an abstract of the Article:

The inheritance system is beset by formalism. Probate courts reject wills on technicalities and refuse to correct obvious drafting mistakes by testators. These doctrines lead to donative errors, or outcomes that are not in line with the decedent’s donative intent. While scholars and reformers have critiqued the intent-defeating effects of formalism in the past, none have examined the resulting distribution of donative errors and connected it to broader social and economic inequalities. Drawing on egalitarian theories of distributive justice, this Article develops a novel critique of formalism in the inheritance law context. The central normative claim is that formalistic wills doctrines should be reformed because they create unjustified inequalities in the distribution of donative errors. In other words, probate formalism harms those who attempt to engage in estate planning without specialized legal knowledge or the economic resources to hire an attorney. By highlighting these distributive concerns, this Article reorients inheritance law scholarship to the needs of the middle class and crystallizes distributive arguments for reformers of the probate system.

February 6, 2018 in Articles, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)