Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Saturday, September 20, 2014

Sitkoff to Chair Committee on Divided Trusteeship

Robert sitkoff

Robert H. Sitkoff, the John L. Gray Professor of Law at Harvard Law School, has been named Chair of the Uniform Law Commission (ULC) drafting committee for an Act on Divided Trusteeship.

The problem of a divided trusteeship stems from the increasingly common practice in estate planning to name a corporate trustee that is given custody of trust property, but with one or more of the investment, distribution, or administration functions of a trusteeship given to a person(s) who is not lawfully designated as a trustee.  Thus, uncertainty remains regarding the fiduciary status of nontrustees who have control or potential control over a function of trusteeship and about the fiduciary responsibility of trustees with regard to actions taken by such nontrustees.  The Drafting Committee on Divided Trusteeship will draft legislation addressing these questions and also outline compatible amendments to existing uniform trust and estate acts. 

As Chair, Sitkoff will oversee the work of the drafting committee, which includes more than a dozen Uniform Law Commissioners.  Sitkoff is an expert in wills, trusts, estates and fiduciary administration and has published numerous works in in leading scholarly journals.  Moreover, Sitkoff is also an active participant in trusts and estates law reform, serving under Massachusetts gubernational appointment as a Uniform Law Commissioner. 

See Sitkoff Named Chair of Drafting Committee for Act on Divided Trusteeship, Harvard Law Today, Sept. 19, 2014. 

September 20, 2014 in Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Article on America's Gun Trust Wars

Lee ford tritt

Lee-Ford Tritt (University of Florida Levin College of Law, Professor of Law) recently published an article entitled, Dispatches from the Trenches of America’s Great Gun Trust Wars, 108 Nw. L. Rev. 743-765 (2014).  Provided below is the article’s abstract:

Without question, the national dialogue pertaining to the right to bear arms and the possible expansion of gun control regulations is shaping up to be one of the more heated political topics of the twenty-first century. At the moment, fervent participants on both sides of this ongoing debate have focused a spotlight on an estate planning instrument commonly referred to as a “gun trust.” Typically, estate planning products rarely cause the kind of nationally impassioned discussion as seen with gun trusts. So why have trusts, a commonly used estate planning tool, become entangled in this lively, and often vitriolic, national discussion concerning the purchase and possession of firearms? Moreover, is recent attention paid to these trusts beneficial to, or distracting from, the broader national discourse concerning federal firearms policy? Unfortunately, America’s gun trust wars have been waged by both sides in an atmosphere of frenzied controversy littered with misinformation. Regardless of the tenor of the debate concerning gun rights and gun control, the fact remains that millions of Americans own firearms, and they have legitimate estate planning concerns. As detailed in this Essay, firearms in an estate can be problematic and may expose an executor, fiduciary, or beneficiary to severe criminal penalties. Although there might be some need for tailored tightening of the laws concerning the transfers to trusts, gun trusts are a legitimate and important estate planning technique with the ability to alleviate the troublingly prejudicial access to guns inherent in current laws. This Essay will examine the legitimate, worrisome, and inaccurate concerns surrounding the uses of gun trusts.

September 20, 2014 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

New Jersey Estate and Inheritance Tax Reform Bills

Tax CutAs I have previously discussed, state lawmakers in New Jersey are currently considering changes to the state’s estate and inheritance tax statutes. There are currently multiple bills being considered that range from raising the threshold and exemption amounts for the taxes to completely abolishing the state’s estate or inheritance tax. Supporters of changes that would reduce the taxes’ effect on the state’s taxpayers have been showing their support by gathering on the steps of the state capital. A list of estate and inheritance reform bills pending in New Jersey can be found here.

See Ashlea Ebeling, Renewed Push to Kill New Jersey Estate Tax, Forbes, Sept. 16, 2014.

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

September 20, 2014 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Article on Covering Your Digital Assets

LaptopMatt Borden recently published an article entitled, Covering Your Digital Assets: Why the Stored Communications Act Stands in the Way of Digital Inheritance, 75 Ohio St. L.J. 405-446 (2014).  Provided below is the introduction of the article:

The Internet [is] the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.1

It is very difficult to regulate and craft legislation to manage a problem that no one fully understands. Nonetheless, the juggernaut that society has come to know as the World Wide Web has come to be managed by a myriad of complex and outdated state, national, and international laws.2 Similarly, social media has emerged over the past decade as the largest use of the internet and is also largely not understood.3 Since social media is a subset of the World Wide Web, it too is regulated by the same tangle of state, national, and international laws.4 Social media and the internet have created remarkable advances in society that have divided generations—one raised with a mouse in hand and one who has never, and may never, fully grasp the technology’s reach. And yet these two generations, separated by the rapid and largely unknown expansion of information and data, must equally confront the digital inheritance problem.

In the realm of inheritance, the intersection of death, cyberspace, and outdated statutes has highlighted one of the many misunderstood issues about the modern internet and social media: what happens to one’s social media and email accounts and digital content when she dies? Do heirs have the right to access old Facebook accounts and email accounts? Do they have a right to use them? These questions are complicated by the twist of federal legislation regulating internet privacy, most notably the Stored Communications Act (SCA).5 The SCA, a subsection of the Electronic Communications Privacy Act (ECPA),6 which originally regulated the interception of electronic  communications by federal law enforcement agencies, has encouraged social  media and email providers to adopt strict provisions regarding who may access a deceased user’s account after death.7 Thus, even though the SCA was originally drafted to inhibit illegal wiretaps,8 it now stands as a barrier to digital inheritance, a purpose which is outside its original scope and conflicts with traditional state approaches to inheritance.

This Note explores how the statutory scheme of the Stored Communications Act interferes with the transfer of digital assets and content after death. Part II lays out three cases that illustrate the SCA’s effect on digital inheritance. Part III examines the history of the SCA and what activity the Act regulates. Part IV explores how the SCA has subsequently influenced the privacy policies of social media and email providers, which prevents heirs, beneficiaries, and estate fiduciaries from accessing the accounts or content of deceased users. Part V explains why allowing digital inheritance is beneficial for society. Finally, Part VI advocates for an amendment to the SCA that would include an exception for parties in digital estates, namely heirs, beneficiaries, and estates fiduciaries, considers implications for such an amendment, and explores how other solutions do not adequately address the issue of SCA interference in digital inheritance.

September 20, 2014 in Articles, Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, September 19, 2014

Retirement Plans: Breaking Up Is Hard to Do

Divorce 2

If you are going through a divorce or legal separation and you or your spouse have money in retirement plans, you will most likely be required to share those assets.  In some cases, those assets will be awarded to one party.  Regardless as to whether you are giving up or receiving assets, it is important to understand the rules that govern asset division in divorce. 

IRAs are divided using a process known as “transfer incident to divorce,” while 403(b) and qualified plans, such as a 401(k), are split under the “Qualified Domestic Relations Order” (QDRO).  You and your spouse need to visibly allocate the category into which each of your retirement assets fall when you submit your information to the judge or mediator.

In specifying that your IRA division be treated as a transfer incident to divorce in your agreement, no tax will be assessed on the separation transaction.  The recipient will take legal ownership of the assets when the transfer is complete and then assume sole responsibility for the tax consequences of any future transactions or distributions.  However, if you fail to sufficiently label your division, you will both owe tax and an early withdrawal penalty. 

QDROs resemble transfers incident to divorce in that they are tax-free transactions as long as they have been reported correctly to the courts and the IRA custodians.   The receiving spouse may roll QDRO assets into his or her own qualified plan or into a traditional or Roth IRA.  Any transfer from a qualified plan pursuant to a divorce settlement that is not deemed a QDRO by the IRS is subject to tax and penalty. 

See Mark P. Cussen, Divorcing? The Right Way to Split Retirement Plans, Investopedia.

September 19, 2014 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Attorney Sued Over Ansel Adams Negatives

Ansel adams

A California man has sued his attorney after he found and subsequently bought two boxes of photographic negatives allegedly by Ansel Adams.  Rick Norsigian claims he was cheated from thousands of dollars from the sale of photographs and posters made from the glass plates.

While Norsigian only paid $45 for the lot at a garage sale, he maintained that the negatives are among those believed to have been lost after a fire in Ansel Adams’ studio. 

Seven years after finding the negatives, Norsigian hired attorney Arnold Peter to represent him in the sale of the prints.  Yet, according to the lawsuit, the decision was ill advised.  Norsigian alleges Peter deceitfully induced him to sign an agreement with defendant Media Partners Global, a company owned by the attorney, to sell the images and now refuses to pay him what he is due.

Yet, in August 2010 the Ansel Adams Publishing Rights Trust sued Norsigian, contending he was violating its commercial trademark on the Ansel Adams name.  He eventually settled the suit by agreeing not to associate Adams’s name, likeness or trademark in any way with the marketing the photographs made from his negatives. 

However, Norsigian says that to date he has not received anywhere near what he is entitled form the sale of images generated from his negatives.  He is seeking compensatory and punitive damages, rescission of his contract with the defendants, the imposition of a constrictive trust and a proper accounting of proceeds and expenses related to the sale of the images. 

See Dan McCue, ‘Lost Negatives’ Owner Sues Attorney for Fraud, Courthouse News Service, Sept. 18, 2014. 

September 19, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

EU Finds Spain's Taxes Discriminatory

EU Court

The European Court of Justice recently ruled that Spanish authorities cannot charge different rates of inheritance tax for residents and non-residents.  In Spain, there are a complex range of tax relief options that can reduce the tax to zero for residents, however, these have previously been unavailable to non-residents.

 Non-residents who have been discriminated against by paying more tax than Spaniards for inheritances or gifts of property will likely be owed a refund of the difference.  The verdict earlier this month could open the floodgate to thousands of people reclaiming their tax.  Thus far, the Spanish authorities have not responded to the ruling.  Spain has six months to change its laws, which should come by January 2016.   

The reason for the decision rested on the notion that charging other members of the EU different rates to Spanish residents went against the spirit of the European union.  The court said the Spanish legislation was discriminatory and there was no reason why inheritance tax should be charged at a higher rate for non-Spaniards than for Spaniards. 

See Liz Phillips, EU Court Rules Against Spain Over Discriminatory Tax Rules, The Telegraph, Sept. 18, 2014.

September 19, 2014 in Estate Planning - Generally, Gift Tax, New Cases, Travel | Permalink | Comments (0) | TrackBack (0)

Questions Remain in Joan Rivers' Death

Joan rivers

Although Joan Rivers passed away on September 4th, details surrounding her death are still unfolding.  According to the Guardian Liberty Voice of Las Vegas, Rivers was undergoing endoscopic surgery at a clinic in New York when her respiratory system became compromised.  She was then rushed into the emergency room where she fell into a coma and placed on life support.  Shortly thereafter, her daughter Melissa authorized medical staff to discontinue life support.  New York health officials are continuing to investigate the clinic where Rivers’ final surgical procedure occurred. 

“It is very likely that Melissa Rivers was following the wish of her mother when she took her off life support . . . In New York, relatives cannot make end of life decisions automatically.  An advance directive must be in place and proper procedure must be followed prior to execution.  In this case, we can assume that Rivers had planned ahead.”

Rivers was outspoken about aging, death and estate taxation.  She once said that show business had hardened her to the point that she was not afraid of dying.  Thus, it is fair to say that Joan Rivers was not shy when it came to estate planning.  While her death may have come as a shock to fans, it was something that Rivers was ready to face, and planned in advance.  

See UltraTrust.com Exposes Postmortem Why Joan Rivers Joked About Her Estate Plan and Paying Taxes—Now Estimated at $45M, Insurance News Net, Sept. 18, 2014. 

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

September 19, 2014 in Current Affairs, Disability Planning - Health Care, Elder Law, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Deceased Celebrities Provide Important Estate Planning Reminders

Shooting StarThe estate planning decisions and mistakes of the rich and famous can provide helpful illustrations and reminders for estate planning. Here are some estate planning lessons illustrated by recent celebrity deaths:

  • Robin Williams: The recent death of Robin Williams in August was an example of how the use of a trust can maintain privacy for a family during the grieving period. However, the terms of a reportedly outdated trust were made public after a co-trustee entered the document into court records to have a new trustee appointed. If a method for appointing a new trustee was established through the trust, then a court order would have been unnecessary and the trust terms would not have become public
  • Casey Kasem: The high-profile family drama that occurred at the end of Casey Kasem’s life highlights the importance of in-depth conversations with family members about end-of-life wishes and nurturing healthy family relationships, especially when multiple marriages complicate the family relationship.
  • Phillip Seymour Hoffman: The choice to use a will rather than trusts by Phillip Seymour Hoffman stirred discussion of the fear of wealthy individuals that their children will be spoiled if they have trusts to rely on for income. However, Hoffman’s decision resulted in significant tax consequences, which brings to light the importance that tax regulations play in estate planning.
  • Michael Crichton: The questions over whether Michael Crichton intentionally disinherited his youngest son provides a remainder of the importance of keeping wills and other estate planning documents updated when new life events occur.

See Thomas Fross & Robert Fross, Lessons Celebrities Can Teach Retirees About Estate Planning, Forbes, Sept. 16, 2014.

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

September 19, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Cemetery Utilizes Technology to Create Interactive Experience

CemeteryCemeteries can be more than simply a place to bury our dead and mourn, but also a place of educational value and cultural growth. The Arnos Vale Cemetery in Bristol filled the role of a community park and offered activities such as yoga lessons and walking paths. Then they added technology and created an interactive way for visitors to honor the dead, which resulted in Future Cemetery.  Future Cemetery utilizes multimedia to create an interactive environment, including projection, audio, guided tours through phone applications, and live reenactments. View a video of Future Cemetery’s use of technology here.

See Plus Aziz, How Will we Mourn the Dead in the Future?, PSFK, Sept. 16, 2014.

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

September 19, 2014 in Death Event Planning, Estate Planning - Generally, Technology | Permalink | Comments (0) | TrackBack (0)