Wills, Trusts & Estates Prof Blog

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

Wednesday, June 22, 2016

Texas Court Finds No Informal Fiduciary Relationship

Caregiver beneficiaryIn Garrett v. First State Bank of Central Texas, a Texas court of appeals decided on a dispute over the ownership of a decedent’s account. The decedent’s estate and caregiver both claimed the account proceeds. The caregiver was a signatory on the decedent’s money market account, and she claimed that the decedent had expressed his wishes for the account to pass to her upon his death. The trial court, however, ruled that her signature did not make her the beneficiary of the account rather just a signatory to pay bills. The court of appeals affirmed the trials court’s finding because often Texas courts are hesitant to find informal fiduciary relationships.

See J. Michael Young, Garrett v. First State Bank of Central Texas: No Informal Fiduciary Relationship, Texas Probate Litigation, June 20, 2016.

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

June 22, 2016 in Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, June 16, 2016

NJ Court Rules Domestic Partnership Cannot Benefit from Estate Tax Break

Same-sex rulingSee Peter J. Reilly, NJ Domestic Partners Denied Estate Break of Married Couples, Forbes, June 9, 2016. Provided below is a summary of the Article:

A sad story is behind the recent New Jersey Tax Court decision—Rucksapol Jiwungkul, as Executor of the Estate of Maurice R. Connolly, Jr. v. Director, Division of Taxation.  The case also ends up being a something of a recap of the struggle over same-sex marriage and its tax implications.  At issue was $101,041 in estate tax that would be avoided if Mr. Connolly and Mr. Jiwungkul, who were registered domestic partners, were treated as spouses for purposes of the New Jersey estate tax.  The court ruled against the estate on a sort of “almost doesn’t count” theory.

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

June 16, 2016 in Estate Tax, New Cases | Permalink | Comments (0)

IRS Rejects Spousal Rollover IRA

IRS rulingA surviving spouse requested four rulings from the IRS to roll over the part of her son’s inherited IRA that was assigned to her by state court as community property, known as a spousal rollover IRA. The IRS, however, rejected these requests, concluding that the applicable part of the IRC applies without regard to community property laws. The IRS must ignore the state community property laws and follow federal tax law, neglecting the surviving spouse’s property interest. Further, any assignment of the son’s interest in the IRA would be regarded as a taxable distribution to the son.

See Dawn S. Markowitz, IRS Issues Harsh Ruling Against Surviving Spouse Seeking to Roll Over Part of Son’s Inherited IRA, Wealth Management, June 6, 2016.

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

June 16, 2016 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, June 13, 2016

Sumner Redstone's Legal Battle Gives Lawyers and PR Firms Great Business

Sumner redstone selfieThe lawyers and PR firms on all sides of Sumner Redstone’s legal battle are the ones raking in the big money while Viacom’s stock price plummets. As the legal saga continues, there is an assembly of local and national lawyers reviewing legal documents with several PR firms staging their cases to the media. Sumner Redstone, Shari Redstone, Viacom, National Amusements, and independent board members are all represented by different law firms and PR agencies, which comes as no surprise considering the $40 billion estate up for grabs.

See Claire Atkinson, Sumner Redstone’s Legal Saga Has Lawyers Rolling in Cash, New York Post, June 11, 2016.

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

June 13, 2016 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Friday, June 10, 2016

Update from Forbes Library on Its Continuance as a Non-government Entity

Forbes LibraryForbes Library trustees are seeking to preserve the relationship between it and the city of Northampton as expressed in Charles E. Forbes will. City Solicitor Seewald is asserting that the library is an arm of the city government or a municipal department, following the Commonwealth’s conclusion that it is not. The probate court is set to interpret the provisions of the will. If the library becomes a part of the city government, then there would be no guarantee that the Northampton would continue to support the library as accepted under the will.

See Forbes Seeks Status Quo, Forbes Library, June 1, 2016.

June 10, 2016 in Current Events, Estate Administration, New Cases, Wills | Permalink | Comments (0)

Wednesday, June 8, 2016

Spousal Election Must Not Be "Willfully Absent"

Elective shareIn Lovett v. Peterson, the Michigan Court of Appeals upheld the probate court’s judgment that a wife was physically separated from her husband for several years while he lived with his mistress but was not “willfully absent” according to the testate spousal election statute. After his death, his wife elected against the will, which would afford her half of the estate. Soon after, the husband’s daughter petitioned the probate court for a declaration that his wife was not the surviving spouse, being willfully absent from him for more than a year before he died. His wife, however, never acted with specific intent to no longer be a part of the marriage, making her not willfully absent under the statute.

See Jason Byrne, COA Holds that a Spouse Must Be Willfully and Physical Absent from Her Decedent Spouse for at Least a Year Before Death To Be Disqualified from Electing Against the Decedent’s Will, Warner Norcross & Judd LLP, May 27, 2016.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

June 8, 2016 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Saturday, June 4, 2016

Forbes Library Cutting Ties with City of Northampton

Forbes LibraryThe Forbes Library board of trustees filed a complaint to cut ties with the city of Northampton, alleging that officials have treated the library as a government entity when it is not. The trustees are pursuing a declaration of the trustees’ rights and status according to founder Charles E. Forbes’ will, which allowed the founding of the library and required it be controlled by a board of trustees. The trustees feel that Northampton officials are gunning to make them a governmental body and further part of the city government. This would undermine their reputation as a charity and discontinue proportional bequests with such city oversight. 

See Laura Newberry, Forbes Library Sues Northampton, Asserting City Cannot Control It, Mass Live, May 23, 2016.

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

June 4, 2016 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Friday, June 3, 2016

Sumner Redstone's Controversy in Estate Plans Everywhere

Sumner redstoneAs the battle continues over Sumner Redstone’s billion-dollar estate, with the current mess of lawsuits, many are questioning his estate planning. Experts are saying that Redstone’s controversy is happening in epidemic proportions with people and charities moving in on the estates of wealthy elders. As the elder population continues to live longer, this problem increases and only becomes worse.

Redstone’s pattern creates the need for settlor’s to make clear provisions in trust. It would be important to define incapacity and appoint who would determine incapacity when the time comes. Redstone’s trust does not define incapacity and gives little control to others while he remains alive. With a well-drafted trust, Redstone could have included a provision (or built it to go into effect after a certain age) allowing a majority of trustees to conclude he did not have the capacity to remove a trustee. Ultimately, it seems Redstone has brought on his own problem.

See James B. Stewart, In Sumner Redstone Affair, His Decline Upends Estate Planning, NY Times, June 2, 2016.

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

June 3, 2016 in Current Events, Elder Law, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Wednesday, June 1, 2016

San Bernardino Shooter's Life Insurance To Be Seized

Civil asset forfeitureA civil asset forfeiture lawsuit was filed Tuesday to seize life insurance payments taken out by the San Bernardino shooter; the policies are worth $275,000. Federal prosecutors state that under federal law, assets accumulated from terrorism against the U.S. are subject to forfeiture. Terrorist’s beneficiaries should not be enriched from such crimes.

See Associated Press, US Seeks to Seize San Bernardino Shooter’s Life Insurance, Fox News, June 1, 2016.

June 1, 2016 in Current Events, New Cases | Permalink | Comments (0)

Thursday, May 26, 2016

Deciding Sumner Redstone's Mental Acuity

SumnerWith Sumner Redstone’s declining health, the case to decide his mental acuity is becoming more difficult and more pertinent with so many third parties involved. To determine his competency for deciding to oust two Viacom trustees, psychiatrists will look for evidence that Mr. Redstone understands relevant facts and appreciates the impact of his decisions. To determine any undue influence on the behalf of his daughter, the court will look at the facts placed before it to see if she threatened him or preyed on his emotions. Mr. Redstone will need to indicate a clear and consistent rationale for the change.

See Erik Eckholm, A Complicated Legal Battle Over Sumner Redstone’s Mental Acuity, NY Times, May 25, 2016.

May 26, 2016 in Current Events, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)