Wills, Trusts & Estates Prof Blog

Ohio Trust Code and Its Impact on the Existing Law

Alan Newman (Associate Professor of Law, University of Akron School of Law) has recently published his article entitled The Uniform Trust Code: An Analysis of Ohio's Version, 34 Ohio N.U. L. Rev. 135 (2008).

Here is the introduction to his article:

Shortly after the National Conference of Commissioners on Uniform State Laws approved the Uniform Trust Code (the “UTC”) in August of 2000, members of the Estate Planning, Trust, and Probate Law (“EPTPL”) Section of the Ohio State Bar Association, and members of the Legal, Legislative, and Regulatory (“LLR”) Committee of the Ohio Bankers League, began studying it. In 2003, a joint committee of members of the EPTPL Section and the LLR Committee (the “Joint Committee”) was formed to continue that study. Over the next three years, the Joint Committee worked on a modified version of the UTC that resulted in the enactment in 2006 of House Bill 416, which includes the new Ohio Trust Code (the “OTC,” or the “Code”).

Prior to the OTC, trust law in Ohio included relatively few statutes and consisted primarily of case law that had developed in the usual common law fashion by which courts resolve disputes arising from the specific facts of the cases before them. The OTC addresses many issues that formerly were either not addressed by Ohio law or were addressed only in difficult to find case law. For the most part, the OTC codified existing law. In some respects, however, it has changed Ohio's trust law. The purpose of this Article is to analyze the new OTC and its impact in Ohio, with a particular focus on the ways it has changed Ohio law and ways it differs from the UTC.

Deficit Reduction Act and State Administration of the Medicaid Program

Julia Belian (Visiting Associate Professor of Law, University of Missouri-Kansas City School of Law) has recently published her article entitled State Implementation of the Optional Provisions of the Deficit Reduction Act, 9 Marq. Elder's Advisor 63 (2007).

Here are excerpts from the conclusion to her article:

The Deficit Reduction Act is a complex piece of legislation that modifies an already complex federal law. It offers a myriad of complex options to states that were already operating widely divergent versions of the Medicaid program.***

Increasing health care costs force consumers to face difficult choices, and the government likewise feels the strain of rising costs. Whether Medicaid was “working” before the DRA became law is irrelevant because, regardless of the ability to get health care to those in need, the costs had reached the point of crippling state budgets. Post-DRA Medicaid is not inherently more complex than pre-DRA Medicaid. States can still choose to adopt different approaches to the various problems they face, all in the hopes of improving health care delivery and reducing health care costs. However, the new state options under the DRA do seem to change the landscape in key ways.***

New Tax Law Protects Widows and Widowers Selling Their Homes

The following is from Tom Herman Tax Break for Surviving Spouses Selling Homes, WSJ.com, Jan. 20, 2008:

Some widows and widowers thinking of selling their home may benefit from a new law enacted last month.

The new law effectively gives them more time to sell and still be eligible for the maximum home-sale tax break available for married couples who file jointly. This change is effective on sales or exchanges beginning this year. Congress passed the new law to provide relief for surviving spouses. * * *

If you're married and file your federal income-tax return jointly with your spouse, you typically can sell your main residence and exclude as much as $500,000 of the gain from gross income. If you're single, the limit is $250,000.

To qualify for the maximum exclusion, you must have owned the home -- and lived in it as your primary residence -- for at least two of the five years prior to the sale.

Under the old law, a surviving spouse would have been eligible to claim the maximum $500,000 exclusion only if he or she filed a joint tax return for the year of death and sold the home during that same year * * *.

The new law includes an important change: A surviving spouse who hasn't remarried typically may be eligible to claim the full $500,000 exclusion from the gain on the sale of a principal residence owned with the deceased spouse if the sale occurs not later than two years after the date of death of the spouse * * *.

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

California Legislature Considering Pet Trust Bill

At one time, California was a leader in the pet trust field when it passed Probate Code § 15212 providing that "[a] trust for the care of a designated domestic or pet animal may be performed by the trustee for the life of the animal, whether or not there is a beneficiary who can seek enforcement or termination of the trust and whether or not the terms of the trust contemplate a longer duration."

Although this statute authorizes trusts for the benefit of pets, it does not make them enforceable. In other words, pet trusts are merely honorary -- the trustee may carry out the trust if he or she wants to but is not obligated to do so.  Almost all modern pet trust statutes, as well as the UPC and UTC, make them enforceable.

The California legislature is now considering SB 685 which would modernize its pet trust statute and make them enforceable.  Here is an excerpt from the Legislative Counsel's Digest of the bill:

This bill would repeal the provisions regarding domestic or pet animal trusts and would provide instead that a trust for the care of a designated domestic or pet animal is for a lawful noncharitable purpose  and terminates when no living animal  on the date of the trustor's death  is covered by the trust,  unless otherwise provided in the trust and subject to certain requirements. The bill would require a court to liberally construe a pet trust to bring it within the bill's provisions, to presume against an interpretation that would render the disposition a mere request or an attempt to honor the pet, and to carry out the general intent of the trust. The bill would provide an order of disposition of trust property upon termination of the trust and would provide authority for the court to name a trustee and to transfer trust property, as specified.  This bill would permit a person interested in the welfare of the pet animal or any nonprofit charitable organization whose principal activity is the care of animals to apply to the court for appointment as trustee or for removal of a trustee. The bill would provide a process for an accounting of the trust, to be waived if the value of the pet trust assets do not exceed $5,000. The bill would require termination of a trust for the care of a covered domestic or pet animal that has a life span of 21 years of age or greater when that animal dies. 

Illinois Small Trust Termination Legislation

The following is from Helen W. Gunnarsson, Small-trust-termination amendment gets mixed reviews, 95 Ill. B.J. 624 (2007).

With the governor’s signature on SB 531, the trustee of a trust having a market value of less than $100,000 may, under certain conditions, terminate the trust and distribute its assets to the income beneficiaries if the trustee determines that the costs of continuing the trust will hamper the trust’s purpose. The new act, PA 95-0605, amends section 4 of the Trusts and Trustees Act, 760 ILCS 5/1 et seq, and adds new section 4.26. Its provisions are effective June 1, 2008. ***

Some attorneys are concerned that the new bill may defeat the settlor’s intent by failing to provide for the remainder beneficiaries and propose the following solution: 

For example, an amendment could provide that actuarial principles should govern the trust’s liquidation, with the income beneficiaries’ life expectancy used to calculate the present value of their interest, and the remainder to be distributed to the remainder beneficiaries.

Same-Sex Unions Now Legal in New Hampshire

As reported earlier on this blog, on May 31, 2007, New Hampshire Governor John Lynch signed legislation authorizing civil unions for same-sex couples starting in January 2008.

The following update is from Beverley Wang, Dozens of gay couples get civil unions at N.H. Statehouse, Boston.com, Jan. 1, 2008:

Dozens of gay and lesbian couples celebrated the arrival of civil unions in New Hampshire in the early moments of New Year's Day Tuesday, bundling up against below-freezing temperatures for a group ceremony as soon as the unions became legal after midnight.

Organizers said they checked in 37 couples for the outdoor ceremony on the plaza of the New Hampshire Statehouse -- the building where the law was voted in and signed in 2007. * * *

New Hampshire's civil unions law -- voted in by the Democrat-dominated Legislature early last year and signed by Democratic Gov. John Lynch in May, gives same sex couples the same rights, responsibilities and obligations of marriage in everything but name. New Hampshire is the fourth state in the nation to allow civil unions and the first to do so without a court decision or the threat of one. * * *

New Hampshire follows Vermont, Connecticut and New Jersey in allowing civil unions. Massachusetts is the only state that allows marriage. New Hampshire record keepers estimate as many as 3,500 to 4,000 civil unions will be performed this first year.

Alternative Minimum Tax Update

Earlier on this blog, I discussed legislation that had passed the House regarding the alternative mininum tax.

Yesterday (December 19, 2007), Congress approved AMT relief legislation and President Bush has indicated that he will sign the bill.

The following excerpts are from David M. Herszenhorn, Congress Averts Higher Tax Bill for Middle Class, NY Times, Dec. 20, 2007:

The tax reprieve postpones for one year only an expansion of the alternative minimum tax, a parallel tax system enacted in 1969 to prevent very wealthy investors from using deductions and tax shelters to avoid paying income tax altogether. The alternative tax has ensnared a growing number of middle-class Americans in recent years because the 1969 law was not indexed to inflation.

Without the fix by Congress, some 25 million filers would have had to pay the tax on their 2007 income, up from four million who paid it on 2006 income, according to the White House.* * *

The measure would increase slightly the amount of income that is exempt from the alternative tax. For individuals, that means the exempt amount increases to $44,350 in 2007 from $42,500 in 2006. For married couples, the exemption amount climbs to $66,250 from $62,550.

California's Publicity Law

Earlier on this blog, I discussed the proposed New York law regarding the publicity rights to a decedent's voice, picture, name, etc. which would greatly expand the interests of the heirs and beneficiaries of a celebrity's estate to control and benefit from the deceased's fame.

I have also discussed California legislation on the same topic with regard to the fight over Marilyn Monroe's estate.  In that posting, I indicated that it was uncertain whether Gov. Arnold Schwarzenegger  would sign the bill.  Well -- he did on October 10, 2007!

Here is an except from the Legislative Counsel's Digest to SB 771:

Existing law establishes a cause of action for damages on behalf of specified injured parties for the unauthorized use of a deceased personality's name, voice, signature, photograph, or likeness for commercial purposes within 70 years of the personality's death, except as specified. Existing law provides that the rights recognized under these provisions are property rights, freely transferable, in whole or in part, by contract or by means of trust or testamentary documents, whether the transfer occurs before the death of the deceased personality, by the deceased personality or his or her transferees, or, after the death of the deceased personality, by the person in whom the rights vest under these provisions or the transferees of that person.

This bill would provide, instead, that the above property rights are freely transferable or descendible by contract or by means of any trust or any other testamentary instrument executed before or after January 1, 1985. It would provide that those rights shall be deemed to have existed at the time of death of any person who died prior to January 1, 1985, and shall vest in the persons entitled to these property rights under the testamentary instrument of the deceased personality effective as of the date of his or her death, except as specified. The bill would provide that, in the absence of an express provision in a testamentary instrument to transfer these rights, a provision in the instrument that provides for the disposition of the residue of the deceased personality's assets shall be effective to transfer the rights.

For additional discussion focusing on the impact of this new law on the Monroe litigation, see Jim Zarroli, Law Decides Who Owns a Dead Star's Image , NPR.org, Oct. 11, 2007.  Special thanks to Melanie Casner (J.D. Candidate, Texas Tech University School of Law) for bringing this article to my attention.

New York Developments

Terry L. Turnipseed (Assistant Professor of Law, Syracuse University College of Law) has recently published his article entitled Estates and Trusts, 57 Syracuse L. Rev. 1135 (2007).

Prof. Turnipseed explains that "[t]his Survey year there have been substantial developments in estates and trusts law in New York, including a handful of important legislative provisions and numerous noteworthy, interesting cases."

Texas Permits Marriages to be Voided Even After Death

The 2007 Texas Legislature added Probate Code § 47A to authorize a court, under certain circumstances, to deem a decedent’s current marriage void for lack of mental capacity even after the decedent has died.  Acts 2007, 80th Leg., ch. 1170, § 4.01.  This section was designed to “undo” marriages entered into due to the actions of conniving and/or abusive caregivers.

1.  Types of Voidable Marriages

a.   Proceeding pending at time of death

If a Family Code proceeding to void a marriage based on lack of mental capacity is pending at the time of death (or if the court has been asked to do so in a pending guardianship proceeding), the court may declare the marriage void despite the death of the decedent.  The court must apply the same standards as for an annulment under the Family Code.

b.  Proceeding not pending at time of death

If a proceeding to void a marriage based on lack of mental capacity is not pending at the time of death, the court may nonetheless deem the marriage void under the following circumstances:

• The decedent entered into the marriage within three years of the decedent’s death.
• An interested person files an application to void the marriage on the basis of lack of mental capacity within one year of the decedent’s death.
• The court finds that the decedent lacked the mental capacity to consent to the marriage and understand the nature of any marriage ceremony that might have occurred.
• The court does not determine that after the date of the marriage, the decedent gained the mental capacity to recognize the marriage relationship and actually recognized the relationship.

2.  Result if Marriage Deemed Void

The surviving partner of the void marriage is not considered as the decedent’s surviving spouse for any purpose under Texas law.  For example, the surviving partner would not be able to receive an intestate share of the estate or claim homestead rights.

North Carolina and Anatomical Gifts

The following is from Dave Undis, "Legally binding" organ donation?, LifeSharers, Sept. 8, 2007:

North Carolina will soon become the 45th state to make signing up to be an organ donor legally binding, according to a story in the Charlotte Observer:

"A new law, which takes effect Oct. 1, makes a driver's decision to be an organ donor, designated by a red heart on a driver's license, legally binding. Gov. Mike Easley signed the bill Friday. In the past, the red heart indicated the driver's intention to be a donor, but it could be overturned by the owner's family. Under the new law, a family member's permission will not be needed to carry out wishes conveyed on driver's licenses."

It will be interesting to see if North Carolina enforces its new law. None of the other 44 states with similar laws enforce them. Families are routinely asked for permission to transplant organs from deceased relatives. These families refuse permission about 50% of the time.

Deeds and Prisoners -- Texas Style

In an interesting Texas statute (H.B. 2566) to take effect on September 1, 2007, a person may not file various documents with the court if he or she is currently an inmate, that is, a person "housed in a secure correctional facility." The documents which the inmate may not file include deeds, abstract of judgments, and all other instruments concerning real or personal property.

The statute does provide exceptions.  The inmate may file the document if he or she includes a statement in the document that he or she is an inmate or, if the document is filed by a non-inmate on behalf of the inmate, that the filing is on behalf of the inmate.

Tennessee Authorizes Self-Settled Spendthrift Trusts and Modifies RAP

The following is from Naomi Snyder, Trust law protects assets from creditors, Tennessean.com, Aug. 5, 2007:

Tennessee has liberalized its trust law to make things easier for those who have millions or hundreds of thousands of dollars to protect.

For the first time, people can set up trusts in Tennessee to benefit themselves and still try to protect assets from creditors or lawsuits, a nice deal for people who have a lot of assets and a lot of liability, such as medical doctors or business owners.

Previously in Tennessee, someone setting up a trust to name himself as a beneficiary couldn't also enjoy asset protection from creditors. * * *

Eleven states allow asset protection for trusts in which the person setting up the
trust can name himself as beneficiary, getting, for example, a regular stream of income from the trust's investments.

Tennessee's new law, which went into effect in July, also allows for trusts that effectively last 360 years instead of 90 years — joining about 20 other states that have this provision.

The article also quotes our colleagues, Robert H. Sitkoff (Harvard Law School) and Max Schanzenbach (Northwestern University School of Law).

Civil Unions to be Legal in New Hampshire Starting January 2008

Yesterday, May 31, 2007, New Hampshire Governor John Lynch signed legislation authorizing civil unions for same-sex couples starting in January 2008.

The legislation also recognizes same-sex unions that are valid in the state in which they were performed.

See AP, New Hampshire law makes same-sex civil unions legal, Boston Globe, June 1, 2007 which also states that "New Hampshire is the first state to embrace same-sex unions without a court order or the threat of one. Connecticut was the first to adopt civil unions without a court order two years ago. A lawsuit challenging the marriage law was pending * * *."

Indiana Enacts Revised Uniform Anatomical Gift Act

On May 3, 2007, the Indiana Governor signed legislation enacting the Revised Uniform Anatomical Gift Act.

Here is the legislative summary:

Provides that the law concerning the anatomical gift promotion fund expires July 1, 2012, instead of July 1, 2007. Adds references to Donate Life Indiana in the anatomical gift promotion fund law. Repeals the Uniform Anatomical Gift Act (current act) and replaces it with the Revised Uniform Anatomical Gift Act. Keeps language from the current act concerning: (1) anatomical gifts to specified donees and the amendment or revocation of these gifts; (2) individuals or entities that may petition a probate court to determine whether an individual has made an anatomical gift or revoked an anatomical gift; (3) hospitals inquiring whether patients are, or would like to be organ donors; and (4) certain immunities regarding anatomical gifts. Provides that if a prospective organ donor has a declaration or an advance health care directive, hospitals must use measures necessary to allow a procurement agency to determine the medical suitability of an organ by insuring that life support is not withdrawn before consultation with the procurement agency. Requires a coroner to cooperate with a procurement organization to maximize the opportunity to recover anatomical gifts. Requires a coroner to document why a postmortem examination occurred outside of a compatible period. Provides that if a coroner or designee of a coroner must be present at certain removal procedures or perform duties at times other than those that are usual and customary for the coroner or designee to maximize tissue or eye recovery, at the request of the coroner or designee, the procurement organization that requested the recovery of a part of a body shall reimburse the coroner or designee for the additional costs incurred by the coroner or designee. Makes it a Class A misdemeanor if an individual, in order to obtain a financial gain, intentionally falsifies, forges, conceals, defaces, or obliterates a document that expresses, makes an amendment to, or refuses a gift of organs, tissues, eyes, or body part intended to be used in research or in transplants. Makes conforming amendments.

Special thanks to Sean J. Fahey (Hall Render Killian Heath & Lyman, P.C., Indianapolis) for bringing this development to my attention.

Oregon Governor Signs Domestic Partnership Law

Yesterday (May 9, 2007), Oregon joined the growing number of states that recognize domestic partnerships when Governor Ted Kulongoski signed legislation giving same-sex couples most of the benefits of a traditional marriage.

See AP, Oregon governor signs gay rights bills, MSNBC, May 9, 2007.

Indiana Law Updates

Here are summaries of two recently enacted Indiana bills as provided by the Indiana legislature:

Senate Bill 0212:

Electronic documents as estate property. Requires a person who electronically stores the documents or information of another person who is deceased to give the personal representative of the estate access to, or copies of, the decedent's stored documents or information. Prohibits a custodian from destroying or disposing of the documents or information of the deceased person for two years after the custodian receives: (1) a request for access to the electronically stored documents or information from the personal representative; or (2) a court order.

House Bill 1508:

Probate and trust matters. Provides that a trust is entitled to certain property tax deductions for real property owned by the trust if the property is occupied by an individual who has a beneficial interest in the trust, would be considered the owner of the property if the property were a life estate, and otherwise qualifies for the deduction. Specifies that the trust entitled to a deduction is not required to file a statement to apply for the deduction if certain conditions are met. Provides that when a court has not directed notice by rule, the default certified or registered mail option is replaced by the option to provide notice by first class postage prepaid mail. Specifies that the notice provided by the clerk of the court to an heir, a devisee, a legatee, or a creditor when letters testamentary or of administration are issued shall be served by certified mail. Provides that a will can be admitted to probate more than three years after the decedent's death if the will is presented for probate less than 60 days after: (1) another will previously offered for probate is denied probate; or (2) the probate of another will previously admitted to probate is revoked. Authorizes the use of an affidavit to obtain the information necessary to determine whether the value of a decedent's gross probate estate is low enough to allow the estate to be administered summarily. Provides immunity from civil liability to a person who provides information in good faith reliance upon the affidavit. Increases the maximum gross value of a probate estate that may be summarily distributed and closed upon the filing of an affidavit from $25,000 to $50,000. Specifies that the personal representative has the right to take possession of all the property of the decedent, without exception. Removes a provision under which the personal representative is not authorized to possess property subject to the surviving spouse and family allowances. Provides that the notice requirements applying to hearings on filed estate accountings also apply to a hearing on a petition for a court to decree the final distribution of an estate. Requires notice to be given by certified mail when a petition for the appointment of a guardian * * *

Special thanks to Sean J. Fahey (Hall Render Killian Heath & Lyman, P.C., Indianapolis) for bringing these developments to my attention.

New Wyoming Laws

Wyoming has recently enacted the Wyoming Unitrust Act which authorizes the creation of or the conversion of an income trust to a unitrust (2007 Wyo. Sess. Laws 154) and has revised its law governing spendthrift trusts (2007 Wyo. Sess. Laws 155).

New Virginia Laws

Virginia has recently adopted the Revised Uniform Anatomical Gifts Act (2007 Va. Legis. Serv. 92 (West)) and has clarified the trustee’s duty to inform and report to the beneficiaries (2007 Va. Legis. Serv. 254 (West)).

New Utah Laws

Utah has recently adopted the Revised Uniform Anatomical Gifts Act (2007 Utah Laws 60) and the Advance Health Care Directive Act (2007 Utah Laws 3).

New South Dakota Laws

South Dakota has recently adopted the Revised Uniform Anatomical Gifts Act (2007 S.D. Sess. Laws 197) and has revised the law governing living wills including the statutory form (2007 S.D. Sess. Laws 75).

New Arkansas Laws

Arkansas has recently adopted the following Acts:

• Uniform Estate Tax Apportionment Act.    2007 Ark. Acts 276.
• Uniform Statutory Rule Against   Perpetuities.  2007 Ark. Acts 240.

North Dakota Enacts Uniform Trust Code

North Dakota has recently enacted the Uniform Trust Code.  House Bill 1034.

The effective date is August 1, 2007.

Revised Uniform Anatomical Gift Act

In 2006, the National Conference of Commissioners on Uniform State Laws approved the Revised Uniform Anatomical Gift Act.  According to NCCUSL,

This act revises the earlier 1968 and 1987 Uniform Acts, which are the basis for organ donation throughout the United States. UAGA 2006 is an important update to reflect the current system of allocations of organ for transplant purposes. Without changing the basic concept that an individual may execute a document of gift to donate organs, UAGA 2006 makes the act more usable than the earlier acts are currently.

Four states, Idaho, South Dakota, Utah, and Virginia, have already enacted this statute and it is currently pending in over 20 jurisdictions.

According to Rob Stein, States revising organ-donation law, Washington Post, April 4, 2007,

While praised by transplant advocates, the model law has stirred concern among some doctors and bioethicists. Critics say it could result in people becoming donors or kept on life support against their or their family's wishes. And some worry that the measure could make doctors more hesitant about administering morphine and other drugs to make dying patients comfortable, for fear of rendering their organs useless for transplantation. * * *

Among many changes, the measure expands the list of people who can consent to an unconscious patient becoming a donor, and makes it clear that a person's decision to be an organ donor cannot be revoked by anyone else. * * *

The most controversial section deals with unconscious patients who have signed donor cards but also "living wills" or other documents that state that they do not want a ventilator or other medical care to keep them alive, which is sometimes necessary to maintain organ viability until a transplant can take place. Under the act, the donor card trumps the living will, which triggered objections from some bioethicists and doctors who care for critically ill patients. * * *

In response, the commission sent states substitute language that calls for family members or others to be consulted in such situations to try to determine what the donor would have wanted. Those states that have approved the law already, however, will have to wait until next year to amend it.

Georgia Update

Mary F. Radford (Professor of Law, Georgia State University College of Law) has recently published her article entitled Wills, Trusts, Guardianships, and Fiduciary Administration, 58 Mercer L. Rev. 423 (2006).  In Prof. Radford's words,

This Article describes the significant Georgia cases and legislation from the period of June 1, 2005 through May 31, 2006 that pertain to Georgia fiduciary law. Specifically, the Article covers cases and legislation on matters relating to wills, trusts, the administration of decedents' estates, and the guardianship and conservatorship of minors and incapacitated adults.

Redevelopment Authorities as Personal Representatives in Pennsylvania

A new law in Pennsylvania allows redevelopment authorities to receive of letters of administration.  2006 Pa. Legis. Serv. Act 2006-171.

A redevelopment authority granted letters of administration has the power to take, clear, combine or transfer title to real property of the estate as necessary to return such property to productive use, and upon payment of fair market value of the property in its current state, to the estate.

New York & Pretermitted Children

New York requires pretermitted children to be in gestation when the testator dies under a recent amendment to § 5-3.2 of the Estates, Powers and Trusts Law.  2006 Sess. Law News of N.Y. Ch. 249. This change is in response to reproductive techniques that allow children to be born years or even decades after the testator's/testatrix's death.

The following explanation is from NY Legis. Leg. Memo 249 (2006):

The measure would avoid the possibility that a child born many years after the death of the testator, without the testator's desire and knowledge, will claim a share of the estate pursuant to EPTL 5-3.2. The sperm, ova or preembryos may have been donated to a fertility clinic, without any intent on the part of the donor that a resulting child would share in his or her estate. The testator's children born during the testator's lifetime would be unfairly deprived of their expected inheritance by a child with whom the testator had no relationship, a possibility that in all likelihood would have not been foreseen or desired by the testator.

Moreover, a testator who anticipates the possibility of having a posthumous child could readily create a trust for such child under his or her last will.

Finally, the administration of the estate would be unduly complicated and prolonged by the uncertainty of possibly posthumous children born years after the testator's death.

District of Columbia enacts presumption of competency

District of Columbia law now provides that an individual is presumed competent to make legal, health-care, and all other decisions unless certified otherwise or deemed incapacitated or incompetent by a court.  Incapacity is not inferred from the fact that an individual is voluntarily or involuntarily hospitalized for mental illness or has mental retardation

The legislation took effect on December 21, 2006.

See 2006 D.C. Sess. Law Serv. Act 16-566.

Organ Donations Easier in Michigan

It is now easier for a person to elect to be an organ donor in Michigan.  According to John Gleason, New state law makes it easier to donate organs, Lansing St. J., Jan. 24, 2007:

A new law that took effect this month [January 2007] makes it easier to add your name to the national donor registry. This initiative * * * requires the Michigan Secretary of State's Office to ask people applying for or renewing their driver's license if they want to become organ donors. Interested participants are identified by a heart symbol on the front of their driver's license and automatically entered into the national donor registry.

New Charitable Remainder Trust Legislation

The following is from the Legislative Update e-Newsletter issued by the National Committee on Planned Giving:

A new law includes a provision that allows charitable remainder trusts with unrelated business taxable income to maintain their tax-exempt status. Beginning in 2007, CRTs with UBTI will have an excise tax imposed in the amount of the unrelated business taxable income itself. The Tax Relief and Health Care Act of 2006, signed into law on December 20, 2006, includes the new provision. This legislation also creates some other potential consequences that, although limited, may not be as welcome. For an expanded discussion of the new provision and its implications see the 1/03/07 article by Marc Hoffman entitled A New Year's Gift for CRTs? On the Planned Giving Design Center at http://www.pgdc.com.

Virginia Update

J. Rodney Johnson, Professor Emeritus of Law, has published his article Wills, Trusts, and Estates, 41 U. Rich. L. Rev. 321 (2006) for the University of Richmond Law Review’s 2006 Annual Survey.

In his introduction, he says:
 

The General Assembly enacted legislation dealing with wills, trusts, and estates that added or amended a number of sections of the Virginia Code in its 2006 Session. In addition, there were six opinions from the Supreme Court of Virginia during the period covered by this review that presented issues of interest to the general practitioner as well as the specialist in wills, trusts, and estates. This article reports on all of these legislative and judicial developments.
 

And here is his conclusion:
 

For the reasons recited herein, it is respectfully submitted that the 2007 Session should (1) repeal or clarify the amendments relating to (i) trusts and the tenancy by the entirety and (ii) a landlord's disposal of a deceased tenant's personal property; (2) clarify the amendments relating to (i) the burial authority of a public guardian or conservator, and (ii) trusts for the care of animals; and (3) enact legislation clarifying its original intent that the presence of a creditor immunity provision in a statute does not prevent the value of property covered by that statute from being included in the value of a decedent's augmented estate.

Pennsylvania Enacts Advance Directive for Health Care Act

The following is from an e-mail message I received from Neil E. Hendershot of the Harrisburg, Pennsylvania law firm of Goldberg Katzman, P.C., who also authors the PA Elder, Estate & Fiduciary Law Blog:

In Pennsylvania, on November 29th, Governor Rendell signed into law Senate Bill 628, which will take effect on January 29, 2007.

The Act changes the law of this Commonwealth on health care powers of attorney and living wills, reauthorizes out-of-hospital do-not-resuscitate orders, and -- for the first time -- authorizes actions by health care representatives selected by relationship to the patient. 

The Act replaces Chapter 54 of Title 20 to provide a statutory means for competent adults to control their health care by written instructions, or through health care agents or representatives and requested orders.  It also provides for execution and revocation of living wills and health care powers of attorney with designated health care agents, and authorizes selection and duties of health care representatives in the absence of an agent designation.

The final form of SB 628 can be found here in PDF format.

For additional information, see Neil's blog entry entitled Gov. Rendell Signs SB 628 into Law!, Nov. 29, 2006.

Trust Taxation -- Canadian Style

Courtesy of the Tax Professor Blog, here are some articles covering the new Canadian laws regarding the taxation of trusts:

• Bloomberg:  Canadian Stocks Slide as Income Trusts Face Taxes, by John Kipphoff
• Bloomberg:  Canada Will Start Taxing Distributions From Income Trust, by Theophilos Argitis
• The Globe and Mail:  Surveying the Fallout from the Trust Bombshell
• Reuters:  Income Trust Shock Waves Sink Toronto Stocks, by Jonathan Spicer and Blaise Robinson
• Wall Street journal:  Tax Move Hits Canadian Equities

New Fractional Giving Rules May Hurt Art Donations

The following excerpts are from Jeremy Kahn, Museums Fear Tax Law Changes on Some Donations, NY Times, Sept. 13, 2006:

Directors and trustees of the nation’s top art museums are preparing a major lobbying effort to reverse a federal tax provision approved last month that they say will significantly harm their ability to acquire new artworks.

The tax law change, included in a little-noticed section of the Pension Protection Act that President Bush signed into law on Aug. 17, affects a practice known as fractional or partial giving, which has become an increasingly popular method for collectors to donate to museums. Proponents of the change say that fractional gifts — under which an artwork is “donated” but can remain largely in the owner’s possession — have been abused by wealthy donors, some of whom received upfront tax deductions for works that will not appear in museum collections for decades, if ever. The changes apply only to fractional gifts made after Aug. 17. * * *

In partial gifts, a donor gives a percentage interest in a work of art — say, 20 percent — to a museum or charity. The donor gets a tax deduction for an equivalent percentage of the work’s value. The museum gets the right to hold the work for a portion of the year, in this case 20 percent, or 73 days.

But the donor can continue to hold the art privately the rest of the time, and in practice many museums have waived their right to possess pieces at all except when they needed them for exhibitions. Donors can then make further fractional gifts in subsequent years, helping to spread out their tax deductions over a longer period. For museums, works that start out as fractional gifts almost always become full donations eventually.

Tax lawyers say that the new law, while not banning fractional gifts outright, creates enough disincentives to end the practice effectively.

Wisconsin Guardianship Reform Bill

In the August, 2006 edition of Bifocal (Vol. 27, No. 6), Betsy Abramson has published her article Wisconsin Legislature Passes Major Guardianship Reform Bill.
   

Here is an excerpt:
   

Wisconsin’s new guardianship law, enacted in May 2006 and effective December 2006, is the work of a great number of dedicated members of the State Bar of Wisconsin’s Elder Law Section and other advocates for nearly a dozen years. These practitioners corrected many problems with Wisconsin’s current law. The statute is now reorganized, removes antiquated terms (e.g., “infirmities of aging”), and creates separate, specific criteria and standards for guardianships of persons and guardianships of estates. It also greatly improves due process; for example, the new provisions reverse the current presumption that all rights are removed unless a court specifically retains certain rights and more deference is given to previously-executed powers of attorney. The reforms specify in great and separate detail the duties and responsibilities of guardians of the person and estate and create a procedure for removal of a guardian, reinstatement of rights, and other post-appointment matters.
   

The original Senate bill may be found here.

Pension Protection Act of 2006

The following is reproduced from an e-mail message I received from the ABA's Joint Committee on Employee Benefits:

Want to know more about the recently signed Pension Protection Act of 2006?  Register for one or more of these teleconferences now!
All three programs will be held from 1:00pm EDT to 2:30pm EDT and will offer 1.5 (for 60 minute states) or 1.8 (for 50 minute states) CLE credit hours
Tuition begins at $125 for ABA JCEB Sponsoring Section Members

Cash Balance Plans:  What is Left After the Litigation (and Legislation)?
Wednesday, August 30, 2006.

This program will be moderated by Bruce Pingree, Baker Botts, LLP, Dallas, TX and speakers include Barry Klein, Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia, PA; Carol Connor Flowe, Arent Fox PLLC, Washington, DC; Thomas Moukawsher, Moukawsher & Walsh, Groton, CT and Elizabeth Drigotas, Deloitte Tax LLP, Washington, DC.  For further information and to register, go to the following web site:  http://meetings.abanet.org/meeting/jceb/JCEB083006/

What Pension Reform Does for Pensions and Their Sponsors:  Defined Benefit Plan Issues in the Pension Protection Act of 2006. 
Thursday, September 14, 2006.

This program will be moderated by Judy Mazo, Segal Company, and speakers include William Bortz, US Department of the Treasury, Washington, DC; Nell Hennessy, Fiduciary Counselors Inc., Washington, DC and Kent Mason, Davis & Harman, Washington, DC.  For further information and to register, go to the following web site: http://meetings.abanet.org/meeting/jceb/JCEB091406/