Wills, Trusts & Estates Prof Blog

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

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Sunday, September 7, 2014

Heir of Secret Photographer Surfaces

Vivian_MaierVivian Maier was a nanny that lived a secret life as a photographer in the 1950s, artistically capturing scenes of the life and times from the streets of Chicago and New York. It was not until she died at 83-years-old, in 2009, that her street photographs began to see acclaim and appreciation. However, a possible heir of Maier has surfaced and the ensuing legal battle has put the sale and display of her work on hold. The current owners of negatives and prints of her work may have to wait years to find out if they can continue selling and promoting Maier’s art.

See Randy Kennedy, The Heir’s Not Apparent: A Legal Battle Over Vivian Maier’s Work, The New York Times, Sept. 5, 2014.

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

September 7, 2014 in Estate Planning - Generally, Intestate Succession | Permalink | Comments (0) | TrackBack (0)

Article on Eliminating the 890 Usufruct to Protect the Blended Family

CastleKatherine H. Dampf recently published a comment entitled, Happily Ever After: Eliminating the 890 Usufruct to Protect the Blended Family, 74 La. L. Rev. 899-935 (2014).  Provided below is the introduction of the comment:

Cinderella lived happily ever after,1 but what became of her wicked stepmother, the Lady Drizella Trumaine?2 Imagine that this classic tale was set in Louisiana and that in the years following Cinderella’s storybook wedding, Cinderella’s father and Drizella spent the remainder of their lives together. Though they were happy, they were not particularly wealthy, and Cinderella’s father never drafted a will. When Cinderella’s father died, Louisiana law granted Drizella an interest in his share of the marital property in the form of a usufruct.3 However, although Drizella was relieved to learn that she would be permitted to use and enjoy her husband’s property in the years following his death, she was dismayed when she learned that Louisiana law also granted Cinderella an interest in the same property, effectively forcing Drizella to share her former husband’s property with her ungrateful stepdaughter.4

One might imagine that this sharing of interests would not be the most optimal arrangement, considering that the two did not have the most natural and affectionate relationship.5 Drizella’s interest only allows her the right to use the property and collect its fruits.6 Consequently, she may encounter financial difficulties if the property does not generate income in the form of civil fruits—like rents or dividends—because she is precluded from selling the property to create liquid income. Given the tumultuous relationship between Cinderella and her wicked stepmother, Cinderella would feel no duty to come to Drizella’s aid. Indeed, Cinderella’s contempt for Drizella might only be exacerbated by a legal scheme that effectively deprives her of any right to her father’s estate while her stepmother is still living and unmarried.7 Louisiana’s default inheritance regime, designed both to approximate the will of the decedent and provide for those left behind, serves no one in this blended family.

A decedent who dies intestate—without a will—necessarily does not express desires regarding the property left behind. Instead, intestacy law imposes a “statutory will” on the decedent.8 Many states have had to rethink traditional intestacy rules to address the new social phenomenon of intestate succession involving a stepparent and a decedent’s children,9 referred to in this Comment as the “Cinderella Problem.”10 Louisiana Civil Code provisions governing intestacy were made with “the family of the Civil Code”11 in mind: a traditional, nuclear family that has become increasingly rare in modern society.12 An artifact from a departed era during which the traditional, nuclear family was bound by lifelong affection, Louisiana’s “statutory will” is out of sync with the modern family. Today, more than one-third of all Americans are members of stepfamilies,13 18% of American adults have a living stepparent,14 and most Americans die without wills.15 With a divorce and remarriage rate higher than the national average,16 Louisiana must do more to balance the competing interests of a blended family in intestacy.

Because Louisiana law fails to adequately address the combination of the stepfamily and intestacy, Louisiana law allows for the dynamic between Cinderella and Drizella to exist to their mutual detriment. Louisiana’s failure to address the needs of the stepfamily in intestacy is made even more apparent by the fact that other jurisdictions—both civil and common law—addressed stepfamily inheritance long ago.17 Louisiana should follow in the footsteps of its sister states and of France, its civilian predecessor, to better address the Cinderella Problem, recalibrating intestacy laws with today’s blended family in mind and preventing injustices like those suffered by Cinderella and Drizella from befalling others.

Accordingly, this Comment considers the failure of Louisiana’s current succession law in the context of the stepfamily. Part I of this Comment discusses the theories underlying succession law, highlighting the role of these theories in intestacy and arguing that they require a careful balancing of the interests of the children and the surviving spouse of the decedent. Part I also details the societal evolution of the family from nuclear to blended, illustrating how the implementation of the theories of succession has become even more problematic. Next, Part II overviews the approach taken by Louisiana to the stepfamily in intestacy, both in the past and in the present, and demonstrates that Louisiana’s current approach is inadequate in several critical respects. Part III then evaluates the merits of approaches to the Cinderella Problem taken by France and other jurisdictions. Finally, in order to solve the predicament facing Cinderella and Drizella, Part IV proposes that a lump-sum-plus-afraction, rather than a usufruct, be allotted to Drizella. A revision of Civil Code article 890 in the context of the stepfamily is long overdue; Louisiana needs to do more for Cinderella and Drizella.

September 7, 2014 in Articles, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 20, 2014

New Intestacy Law in England May Affect Foreign Investors

LawNew intestacy rules will go into effect in England and Wales October 1 of this year and may add additional incentive for U.S. investors with real estate properties in England or Wales to have a valid will in place. The new rules are part of the English Inheritance and Trustees’ Powers Act 2014. Under the new rules if an owner of real estate in England or Wales dies intestate the entire property will pass to a surviving spouse if there is one. If there are children as well as a spouse, then the rules do not change as much. However, the spouse will receive their share absolutely rather than as a life estate.  If these outcomes are not agreeable with an investor’s intentions, then the good news is that foreign wills will be recognized as long as they are valid and executed in the individual’s country of domicile or continuous residence, or where the individual is a national.

See Richard Norridge, Mark Johnson & Gareth Thomas, Changes to Inheritance and Intestacy Rules in England and Wales May Affect Overseas Property Investors, Herbert Smith Freehills, Aug. 12 2014.

August 20, 2014 in Estate Planning - Generally, Intestate Succession, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 29, 2014

Millionaire Dies Intestate With 30 Possible Heirs

Payment2After the death of Truong Dinh Tran in 2012, the legal battle to distribute his $100 million wealth began and will likely continue for years. Tran left no will, and at least five women had children with Tran for a known total of 16 children. One of the women who is the mother of Tran’s children claims she was married to Tran and a court awarded her half of his estate in May, even though she filed as single on her tax returns. Now, roughly 30 heirs are battling it out over Tran’s millions.

See John Leland, Mr. Tran’s Messy Life and Legacy, The New York Times, July 24, 2014.

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

 

July 29, 2014 in Estate Planning - Generally, Intestate Succession | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

Death and Debt

Debt

When someone dies, their assets become the property of their estate.  Before an estate can distribute assets to beneficiaries, each estate is obligated to pay all debts, costs, taxes and other liabilities due. 

Yet who manages this?  When writing wills, it is usual to appoint an executor to handle the tasks associated with an estate.  Under “fiduciary duty,” executors are legally required to act with complete and transparent good faith while carrying out the deceased’s wishes. 

If no will is written, a state’s probate court can appoint an administrator, who has the same powers as an executor.  While there is a hierarchy of people who are asked to take on the role, nobody can be forced to be an executor or administrator unless they want to be. 

When debt is passed on there are two key things to understand: (1) The debt does not die with the decedent, and must usually be paid; (2) nobody can inherit debt.  If the estate does not have enough money to cover debt, lenders will write off their losses.  With some rare exceptions, heirs are not liable for the deceased's debts.  These exceptions include: surviving spouses in community property states, adult children of a late parent who could not pay for his or her long term care, and heirs legally responsible for managing the estate.

See Peter Andrew, What Happens to Card Debt When Someone Dies, Desert News, July 18, 2014.

July 21, 2014 in Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (1) | TrackBack (0)

Wednesday, July 2, 2014

Article on Retirement Accounts and Law of Succession

Inheritance

Stewart E. Sterk (Professor of Law, Benjamin N. Cardozo School of Law, Yeshiva University) and Melanie B. Leslie (Professor of Law, Benjamin N. Cardozo School of Law, Yeshiva University) recently published an article entitled, Accidental Inheritance: Retirement Accounts and the Hidden Law of Succession, 89 N.Y.U. L. Rev. 165-237 (2014).  Provided below is the authors’ abstract:

Americans currently hold more than $9 trillion in retirement savings accounts. Those accounts, together with the family home, are the principal source of wealth for most working and retired Americans. But when a retirement accountholder dies prior to exhausting retirement savings, what governs the distribution of the account? Most often, not the accountholder’s will or trust, but a one-page fill-in the-blanks beneficiary designation form that the accountholder filled out, typically without advice of counsel, when she or he opened the account.

When accountholders fill out beneficiary designation forms, they are focused on starting a new job or beginning to save for retirement, not on estate planning. Yet the accountholder’s beneficiary designations often trump express provisions in a will, trust instrument, prenuptial agreement, or divorce decree—documents prepared with inheritance in mind. Moreover, the accountholder may neglect to change the beneficiary designation to take account of changed life circumstances, causing his or her retirement assets to pass to a beneficiary he or she never would have chosen later in life. To make matters worse, although wills doctrine has developed a set of constructional rules to deal with changes of circumstance, those rules do not generally apply to beneficiary designation forms. The current legal framework often frustrates the intent of the accountholder.

This problem, which has already spawned a significant volume of litigation, will become exponentially worse over the coming decade, as more holders of substantial accounts reach the end of their life expectancy. Reform is critical. The financial intermediaries who currently draft beneficiary designation forms have little incentive to improve them because accountholders and employers are unlikely to choose providers based on the quality of their forms. Federal and state legislation is necessary to ensure that these assets are distributed consistently with accountholders’ intentions.

July 2, 2014 in Articles, Estate Planning - Generally, Intestate Succession, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Thursday, June 12, 2014

Article on Intestate Inheritance and Stepparent Adoption

James jones

James T.R. Jones (University of Louisville, Louis D. Brandeis School of Law) recently published an article entitled Intestate Inheritance and Stepparent Adoption: A Reappraisal, Real Property, Probate and Trust Law Journal, Vol. 48, 2013; University of Louisville School of Law Legal Studies Research Paper Series. Provided below is the abstract from SSRN:

Societal attitudes toward adoptions have shifted over time, and adoption statutes vary widely among U.S. jurisdictions. Unique challenges arise when drafting statutes that affect the intestate inheritance rights of adoptees. Drafters of uniform laws and state legislatures attempt to balance the goal of complete assimilation of an adoptee into an adopted family with the prevalence of remarriages and stepfamilies. This article analyzes the intestate inheritance rights of adoptees in stepparent adoptions generally, against the backdrop of Kentucky law. Noting that stepchildren deserve a well-considered examination of their intestate inheritance rights, this article offers suggestions for stepparent adoption statutes in Kentucky and nationwide.

June 12, 2014 in Articles, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0) | TrackBack (0)

Sunday, June 8, 2014

Lack of Residuary Clause Causes Property Not Disposed of by Will to Pass by Intestacy

WillAnn Aldrich drafted her will on a pre-printed form making only specific bequests of realty, financial assets, and an automobile to her sister and, if her sister did not survive, to her brother.  Her sister predeceased leaving Aldrich real property and cash which she deposited in an investment account.  Aldrich died without ever changing her will to make a disposition of the property received from her sister.  A construction proceeding took place to determine the disposition of the property not mentioned in the will.  The trial court entered summary judgment for the personal representative whose position was that the will disposed of the after-acquired property.  The intermediate appellate court reversed.

In Aldrich v. Basile, the Florida Supreme Court affirmed, holding that the intention of the testator as expressed in the will controls the legal effect of the gifts in the will and does not allow the court to reform the will to create a residuary clause where none exists.  Accordingly, the property not covered by the will passes by intestacy.

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

 

 

June 8, 2014 in Estate Planning - Generally, Intestate Succession, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Thursday, May 22, 2014

Human Ashes Do Not Pass Through Intestate Distribution

UrnIt is both sad and complicated when a young person dies unexpectedly. Scott Wilson was only 23 when he was killed in a car crash and died without a will. His divorced parents agreed that he should be cremated but could not agree what should be done with his ashes. Wilson’s father asked that the ashes be divided equally between each parent while his mother objected to dividing his remains due to religious reasons.

In Wilson v. Wilson, the Florida Fourth District Court of Appeals decided that Wilson’s ashes were not property and could not be divided between the parents. The court based their decision on the reasoning that human ashes should be treated like a human body, which is not property, and that this was an issue to be resolved by the state’s legislature through the probate code.

See Brett Clarkson, Son’s Ashes Can’t be Divided Between Feuding Mom and Dad, Court Rules, Sun Sentinel, May 21, 2014.

May 22, 2014 in Estate Planning - Generally, Intestate Succession, New Cases | Permalink | Comments (0) | TrackBack (0)

Friday, May 16, 2014

Three Haunting Legal Mistakes

Legal

Legal mistakes made during ones lifetime can create many problems at death.  Provided below are three court cases, in which legal mistakes triggered unnecessary litigation after death.

  1. Selzer v. Dunn. “No buy-sell agreement means no sale.”  In this case, two co-business owners in Texas purchased $2 million life insurance policies on each other’s lives.  When one of the business owners passed, the proceeds were paid to the surviving shareholder.  However, the family of the deceased wanted the surviving owner to surrender the insurance proceeds in return for stock, but the owner refused.  The court held the owner was not required to purchase decedent’s stock.  There was neither an oral agreement nor an implied trust. 
  2. Aldrich v. Basile. “A DIY last will and testament is DOA in Court.”  Ms. Adrich failed when she created her own will.  Her pre-printed forms failed to indicate who would inherit her estate and after her death, her brother asserted he should inherit the bulk of her estate as her intent was clear.  Her nieces argued there was no valid will and therefore they should receive the residue of the estate by law.  The Florida Supreme Court held for the nieces. 
  3. PHL Variable Insurance Company v. Bank of Utah. “The consequences of lying.”  A $5 million life insurance policy was issued on William Close.  When he died, the insurance company refused to pay the death benefit and refund the premiums paid because Mr. Close had lied on various material questions in the life insurance application.  The court agreed that no death benefit should be paid.

See Steve Parrish, Legal Mistakes That Haunt After Death: Three Cases, Forbes, May 13, 2014.

 

May 16, 2014 in Estate Administration, Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Wills | Permalink | Comments (0) | TrackBack (0)