Wills, Trusts & Estates Prof Blog

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

Thursday, September 20, 2018

Tim Conway Recovers From Brain Surgery as Family Battle Over Comic's Fate Rages on

ConwayTim Conway's second wife and daughter are dueling  in court over sole conservatorship over the actor, who is currently recovering from brain surgery and is also suffering from dementia. Kelly Conway, the daughter of the 84-year-old actor, revealed that a Los Angeles court has decided a permanent conservatorship will be appointed in November. The actor had signed a power-of-attorney and health care directives designating his wife, Charlene Conway, as his caregiver, according to Charlene herself.

The person making decisions for his care must be competent. There are others that surround him that have only their best interest at heart and not my dad’s. That’s why I want to be the one in charge of his care," Kelly claims. She also says that she has been banned from her father's hospital room.

A Los Angeles judge denied Kelly’s petition to be appointed as her father’s conservator, finding that her concerns about Charlene’s medical decisions regarding her father are moot for now, as he’s been hospitalized since September 3.  In court documents, Michael Harris, who was appointed to protect Conway’s interest during the ongoing feud between daughter and stepmother, also said the comedian is “unable to communicate” and is “suffering from fluid on the brain.”

See Stephanie Nolasco, 'Carol Burnett' Star Tim Conway Recovers From Brain Surgery as Family Battle Over Comic's Fate Rages on, Fox, September 17, 2018.

September 20, 2018 in Current Events, Disability Planning - Health Care, Estate Planning - Generally, Guardianship, New Cases | Permalink | Comments (0)

Wednesday, September 19, 2018

No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception

WritingwillA no-contest clause essentially makes all gifts under the will or trust conditional upon not challenging the document, and the practice of including one is becoming increasingly popular in American society. Blended families may have a higher chance of disagreements and squabbles over inheritances, as beneficiaries may have varying levels of gifts.

Trust and estate litigation is frequently driven by emotion, and often times the beneficiary’s complaints are not rational, thus corresponding litigation can severely tap into the estate's assets and funds. This is what the settlor is typically trying to avoid by the use of a co-contest clause. The Wyoming Supreme Court recently held in EGW and AW v. First Federal Savings Bank of Sheridan, 413 P.3d 106 (Wyo. 2018) that a no-contest does not violate public policy in Wyoming. 

The Court ruled that a “testator has the right to grant bequests subject to any lawful conditions he or she may select.” In the opinion, the Court explains that the ability to relinquish a person's property in the way they so choose is a strongly held right, and one that is backed by the full power of the law. The Court also found that even with challenge is in good faith and with probable the no-contest clause is still enforceable. Many states allow challenges made with probable cause to be brought in spite of a no-contest clause, a principal that is set forth in § 3-905 of the Uniform Probate Code, but Wyoming did not adopt that section of the Code.

See Carol Warnick, No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception, Fiduciary Law Blog, September 12, 2018.

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

September 19, 2018 in Current Events, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Man Charged with Killing Wife at Sea Sought to Inherit her Estate, Prosecutor Says

BennettLewis Bennett, 41, was charged in February with second-degree murder on the high seas in the May 2017 disappearance of Isabella Hellmann, 41, of Delray Beach, Florida. The two were on their delayed honeymoon with plans to visit St. Maarten, Puerto Rico and Cuba.

The trial for his wife's murder has been postponed until December while prosecutors have asked a federal judge in Florida to admit conversations between Hellmann and her family, which they are believed to have discussed arguments over a potential move to Australia, financial struggles and the raising of their daughter. Prosecutors claims that the couple argued constantly, and that Bennett was greedy for her apartment and bank account, which would show a possible motive for her murder. Hellmann's body has yet to be found.

The FBI and investigators say that there is evidence that Bennett tried to intentionally sink the boat and that he made no attempts to locate his wife. Instead the FBI claim that he immediately got into a life raft with luggage, coins, and even a tea set.

See Ryan Gaydos, Man Charged with Killing Wife at Sea Sought to Inherit her Estate, Prosecutor Says, Fox News, September 17, 2018.

 

September 19, 2018 in Current Events, Estate Planning - Generally, New Cases, Travel | Permalink | Comments (0)

Tuesday, September 18, 2018

Judge Rules Hawaiian Princess Unfit to Manage $215m Trust

Hawaii-county-mapThe last "princess" Hawaii, a descendant of the Hawaiian royal family that was overthrown in 1893, has been found to not possess sufficient capacity to manage her $215 million trust. Abigail Kawānanakoa, 92, is also the great-granddaughter of James Campbell, a sugar plantation owner that was one of Hawaii's largest landowners, and whom Kawānanakoa inherited much of her fortune from.

Kawānanakoa was known locally to be quiet and private, but also would lend a hand to many in need by paying people's bills and mortgages. In 2001, the heiress also established a $100m trust aimed at supporting Native Hawaiian language, culture, art, education, health and housing. “At the moment, she is a benefactor for the Hawaiian people,” said Lilikalā Kame’eleihiwa, director and professor at the University of Hawaii’s Center for Hawaiian Studies and a board member for Kawānanakoa’s trust.

But Kawānanakoa had a stroke last year and allegedly began to act "out of character." She married her girlfriend of over two decades, Veronica Gail Worth, and fired her attorney, Jim Wright after he claimed she was no longer able to serve as a trustee. Kawānanakoa hired new representative, Michael Lilly, and told a judge in Honolulu that she desired to remove Wright and appoint new trustees, including her wife.

The judge on Monday removed Wright as trustee, but appointed First Hawaiian Bank in his place. He said that he believed Kawānanakoa was able to decide that she wanted a trustee replaced, but that it was more complicated to appoint someone new, and that he didn’t find her capable of managing her financial assets.

See Breena Kerr, Judge Rules Hawaiian Princess Unfit to Manage $215m Trust, The Guardian, September 15, 2018.

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

September 18, 2018 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (1)

Wednesday, September 5, 2018

IRS Proposes Amendments to Regulations Regarding Charitable Contributions

SunshineThe Internal Revenue Service has proposed amendments to regulations under section 170 of the Internal Revenue Code concerning rules governing availability of charitable contribution deductions when the taxpayer receives or expects to receive a corresponding state or local tax credit. Accordingly, the IRS also has proposed similar amendments to he regulations under section 642(c) to apply similar rules to payments made by a trust or decedent's estate.

The proposal, REG-112176-18, was published on August 27, 2018, and will be discussed at a public hearing on November 5, 2018.

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

September 5, 2018 in Current Events, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Friday, August 31, 2018

Fore! California Court Drives Away Claim that Trustee’s Attorney Breached Trust

GolfingChristina Cortese is the biological daughter of Francesca Naify and the stepdaughter of Robert Naify, and after the death of her mother Francesca, she inherited a "modest" amount. Under the advice of attorney Sherwood and the promise by her stepfather that she would inherit a 250-acre golf course, she terminated her mother's trust. Cortese was shocked when she was not a beneficiary of Robert Naify's estate.

She sued Sherwood in San Francisco County Superior Court, alleging breach of trust and claiming that Sherwood assisted Robert in effectuating a plan of “withholding community property from Francesca’s estate, devaluing Francesca’s estate, mismanaging her trust, and terminating it in a manner that benefited Robert.”

The appellate court looked at the factual allegations to determine whether she had alleged a conspiracy within the meaning of Civil Code section 1714.10. The court could not “conceive how Sherwood could have participated in Robert’s alleged breaches of fiduciary duty without an implied agreement to do so.” Because of the statutory requirements, she was required to seek a judge's permission to file the claim, and as she failed to do so the appellate court found her claim legally insufficient.

See Jeffrey S. Galvin, Fore! California Court Drives Away Claim that Trustee’s Attorney Breached Trust, Trust on Trial, August 27, 2018.

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

August 31, 2018 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Travel, Trusts | Permalink | Comments (0)

Wednesday, August 29, 2018

Article on Congress and Commercial Trusts: Dealing With Diversity Jurisdiction Post-Americold

FlalawS. I. Strong published an Article entitled, Congress and Commercial Trusts: Dealing With Diversity Jurisdiction Post-Americold, 69 Fla. L. Rev. 1021 (2017). Provided below is an abstract of the Article:

Commercial trusts are one of the United Statesmost important types of business organizations, holding trillions of dollars of assets and operating nationally and internationally as a "mirror imageof the corporation. However, commercial trusts remain underappreciated and undertheorized in comparison to corporations, often as a result of the popular but mistaken belief that commercial trusts are analogous to traditional intergenerational trusts or that corporations reflect the primary or paradigmatic form of business association.

The treatment of commercial trusts reached its nadir in early 2016, when the U.S. Supreme Court held in Americold Realty Trust v. ConAgra Foods, Inc. that the citizenship of a commercial trust should be equated with that of its shareholder-beneficiaries for purposes of diversity jurisdiction. Unfortunately, the sheer number of shareholder-beneficiaries in most commercial trusts (often amounting to hundreds if not thousands of individuals) typically precludes the partiesability to establish complete diversity and thus eliminates the possibility of federal jurisdiction over most commercial trust disputes. As a result, virtually all commercial trust disputes will now be heard in state court, despite their complexity, their impact on matters of national public policy, and their effect on the domestic and global economies.

Americold will also result in differential treatment of commercial trusts and corporations for purposes of federal jurisdiction, even though courts and commentators have long recognized the functional equivalence of the two types of business associations. Furthermore, as this research shows, there is no theoretical justification for this type of unequal treatment.

This Article therefore suggests, as a normative proposition, that Congress override Americold and provide commercial trusts with access to federal courts in a manner similar to that enjoyed by corporations. This recommendation is the result of a rigorous interdisciplinary analysis of both the jurisprudential and practical problems created by Americold as a matter of trust law, procedural law, and the law of incorporated and unincorporated business associations. This Article identifies two possible Congressional responses to Americold, one involving reliance on minimal diversity, as in cases falling under 28 U.S.C. §§ 1332(d) and 1369, and the other involving a statutory definition of the citizenship of commercial trusts similar to that used for corporations under 28 U.S.C. § 1332(c). In so doing, this Article hopes to place commercial trusts and corporations on an equal footing and avoid the numerous negative externalities generated by the Supreme Courts decision in Americold.

August 29, 2018 in Articles, Current Affairs, Estate Planning - Generally, Income Tax, New Cases, Trusts | Permalink | Comments (0)

Monday, August 27, 2018

Animals Who Inherit Money From Their Owners Pay Death Taxes Like Everyone Else [Pennsylvania]

HorseIn a recent case in Pennsylvania, the court decided that even though animals are not persons under the legal definition, neither are they included in the entities that are exempt from the state's inheritance tax nor listed in the types of entities that have lowered inheritance tax rates. The Chester County Orphans' Court Divison ruled in Lesley G. King Estate ruled that trusts set up at death for the health and benefit of animals are subject to the full Pennsylvania inheritance tax rate of 15%.

King passed away on May 14, 2016, and in her will established a trust for several animals, including 2 horse, 2 dogs, 2 cats, and a flock chickens, in which the assets then would pass to other human beneficiaries after the last animal's death. When the executor filed the estate's tax return in 2017, Pennsylvania hit the $410,000 estate with a 15% inheritance tax. The representative claimed that because the inheritance tax is only assessed against persons that inherit and therefore the tax should not be assessed at all.

The court disagreed, finding that even though animals are still not to be seen as persons under the law, trusts for their benefit set up at death can be assessed the state's full inheritance tax.

See Amanda DiChello, Animals Who Inherit Money From Their Owners Pay Death Taxes Like Everyone Else, At Your Bequest, August 14, 2018.

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

August 27, 2018 in Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (1)

Saturday, August 25, 2018

Harper Lee Estate Sues Broadway Interpretation of To Kill a Mockingbird

AtticusIn a June 2015 agreement, author Harper Lee granted the production company Rudinplay, owned by Scott Rudin, the option to acquire the worldwide stage rights for To Kill a Mockingbird for $100,000, subject to Lee’s right of approval regarding the selection of a playwright, as well as the right to review and comment on the script. The agreement also provided that the play could not “derogate or depart in any manner from the spirit of the Novel, nor alter its characters." Lee approved Rudin's choice of playwright, but died before she could approve of the play's first draft.

The representative of Harper Lee's estate, Tonja Carter, sued the producer alleging that he violated the terms of the licensing agreement. She alleges that the play's script drastically altered the character of the iconic defense attorney Atticus Finch (who is to be played by Jeff Daniels), changed the way the Finch's children spoke, expanded the role of the housekeeper, Calpurnia, and even added two new characters. She also claims that Rudin's responses to the estate objections were insufficient.

Rudin and Rudinplay countersued for $10 million, alleging Carter was attempting to default the play into cancellation by throwing the production off the required timeline for Rudinplay to exercise its option to acquire the novel’s live stage rights set forth in the 2015 agreement. Rudin not only asked the court to rule quickly as to not throw the production off schedule, but also declared that the court should see the play in all its entirety before they could determine if it was in the spirit of the beloved book.

The court declined, but ordered them to create and submit a filmed version of the play before the trial. The parties settled amicably in May before a filmed version was submitted.

See Amanda DiChello, Harper Lee Estate Sues Broadway Interpretation of To Kill a Mockingbird, At Your Bequest, August 3, 2018.

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

August 25, 2018 in Books, Current Events, Film, New Cases | Permalink | Comments (0)

Tuesday, August 21, 2018

“Que Je T’Aime”: L’affaire d’heritage de Johnny Hallyday

HallydayJohnny Hallyday, nicknamed the "French Elvis," passed away in December of last year at the age of 74. In a will executed in California, the signer left all of his assets to his fourth wife Laeticia in trust, which will then pass to their two adopted - Jade and Joy - children upon her death. Here are the problems: Johnny was a French national that split his time between homes in Los Angeles and Barthélémy, a French Caribbean island. France has a law of forced heirship that may entitle Hallyday's two children from previous marriages, Laura and David Hallyday, a portion of their late father's estate. But that law hinges upon the domicile of the French national as the domiciled country's laws would dictate the disposition of the estate.

Did Hallyday become domiciled in California or even intend to become domiciled in California? For persons who have homes in more than one place, this can be a difficult question to answer as there are numerous factors that can contribute to this analysis. California also has a statute that says anyone can select any law to govern the disposition of the estate under that instrument, as long as it would not offend California public policy, not matter the estate holder's domicile.

The idea of not leaving anything to children upon one's death appears to be completely abhorrent in French culture. The tabloids have simply been in a frenzy wondering what will come of "French Elvis" and his children. This adds to the question of why the sole beneficiary of Hallyday's will, Laeticia, has not yet validated her late husband's will in California courts but has instead allowed the litigation to be held in the courts in France.

See Adam Streisand, “Que Je T’Aime”: L’affaire d’heritage de Johnny Hallyday, National Law Review, August 21, 2018.

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

August 21, 2018 in Current Events, Estate Planning - Generally, New Cases, Travel, Trusts, Wills | Permalink | Comments (0)