Wills, Trusts & Estates Prof Blog

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

Monday, February 1, 2016

Common Pitfalls Executors Should Avoid

New estate planServing as an executor is a very difficult task that carries with it many legal responsibilities. An executor should be careful to not pay bills be careful and should instead get a good grasp of the estate’s financial situation. They should also be careful not to use the estate’s assets to play the market, and they should avoid mishandling real estate. Executors also need to be aware of the tangible assets that belong to the estate to avoid losing any of them. “Executors must find all of the deceased’s assets and sort through all of their personal belongings to account for the entire estate, says Victor Ngai, an executive at Guardian Life Insurance Co. of America in New York.” Being an executor is a tough job and a person needs to be well prepared for dealing with all their fiduciary responsibilities.

See Veronica Dagher, The Biggest Mistakes Executors Make, The Wall Street Journal, January 31, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

February 1, 2016 in Estate Administration, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Friday, January 29, 2016

Obama Administration Close To Approving New Investment Advice Rule

Obama regulationThe Obama administration is close to approving a new controversial investment advice rule that will deal with retirement accounts. “The Department of Labor sent the so-called fiduciary rule to the White House’s Office of Management and Budget (OMB) for final approval Thursday.” This new fiduciary rule proposal will be made public once the White House signs off on it. It will raise the investment standards for retirement advisors and require them to act in the best interest of their clients. The new proposed rules would also try to prevent advisers from purchasing expensive investment products that will benefit them more than their clients. Critics of the new proposed rules say it will impose more costs and burdens on investment advisers who will then have to pass the increased costs their services onto consumers.

See Tim Devaney, Retirement advice rule nears White House approval, The Hill, January 29, 2016.

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

January 29, 2016 in Current Affairs, Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

Tuesday, January 26, 2016

The Work That Goes Into Finding The Heirs Of An Estate

Last willThe duty of an executor to locate all heirs who are entitled to a share in the assets of an estate is something that is recognized in many jurisdictions. The difficulty involved with the process of locating heirs will often depend on the Will and the circumstances surrounding the specific situation. This article discusses some of the self-help remedies that executors can use to locate heirs. The executor might also want to consider hiring a professional researcher if the task of locating heirs becomes too difficult or complex. It is important for the executor to make a “reasonable effort” to find the heirs in order to fulfill the required standard that this column discusses.

See Suzana Popovic-Montag and Ian M. Hull, The Process of Locating The Heirs of an Estate, The Huffington Post, January 25, 2016.

January 26, 2016 in Estate Administration, Estate Planning - Generally, Intestate Succession, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, January 25, 2016

Lawyer Wins $350,000 Judgment In Defamation Lawsuit Over Bad Online Review

JudgmentAn appeals court in Florida has upheld a $350,000 judgment for a lawyer who sued a former client for defamation over negative reviews that the client posted about the lawyer on the internet. In this case the client had posted reviews that claimed the attorney charged the client “four times the amount of fees originally quoted, that she lacked integrity, and that she falsified a contract.” The court of appeals rejected the defendants First Amendment argument holding that their review had made factual allegations that the evidence showed to be false. The reviews that a person posts online can have a negative impact on a person’s livelihood, especially if they are making false and libelous allegations about that person.

See Lawyer Awarded $350,000 Based On Negative Online Reviews Posted By Former Client, Law Office of Donald D. Vanarelli, January 22, 2016.

January 25, 2016 in Estate Planning - Generally, Professional Responsibility, Web/Tech | Permalink | Comments (0)

Sunday, January 24, 2016

Narrow Window Of Liability For Attorneys Protected By Colorado Supreme Court

Court rulingThe Colorado Supreme Court has recently reexamined the issue of whether an attorney can be held liable to a non-client in a legal malpractice lawsuit. In Baker v. Wood, the court affirmed Colorado’s general history of classifying claims of attorney malpractice by non-clients as being untenable. “Historically, in Colorado, attorneys have been liable to non-clients only for fraud, malicious conduct, and negligent misrepresentation resulting in business-related pecuniary losses.” The ruling means that an attorney does not owe a legal duty of care unless there is some sort of an attorney-client relationship. There are many important public policy reasons for having such a strict privity rule. An attorneys liability should not be extended to include an unforeseeable and potentially unlimited number of claims from third parties who they never even represented. The decision by the Colorado Supreme Court can be read here.

See Miles Buckingham, Colorado Supreme Court’s Baker Opinion Affirms Narrow Window of Liability for Attorneys, Nemirow Perez P.C., January 20, 2016.

Special thanks to Professor Jerome Borison (Sturm College of Law, University of Denver), for bringing this opinion to my attention.

January 24, 2016 in Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Friday, January 22, 2016

Battle over $100 Million Executor Fee Billed To Estate Of Leona Helmsley

HelmslayThere is currently a legal battle brewing over a $100 million fee submitted by the executors overseeing the estate of the late hotel magnate Leona Helmsley. Lawyers for New York Attorney General Eric Schneiderman have argued that the $100 million fee is “exorbitant, unreasonable and improper,” and they say that a fee of $10 million would be more reasonable for the work that was done. Helmsley was known as the “Queen of Mean” and became famous when her Will left $12 million to her dog Trouble (who eventually sadly only got $2 million). The bulk of the hotel magnates $4.8 billion estate was left to charity. The executors, who “are two grandchildren, an attorney and a business adviser” have defended the large fee by saying that they administered an “extraordinarily complex estate…in the face of enormous risks.”

See Battle brews over $100M fee billed to ‘Queen of Mean’ NYC estate, Fox News, January 22, 2016.

January 22, 2016 in Estate Administration, Estate Planning - Generally, Professional Responsibility, Wills | Permalink | Comments (0)

Monday, January 18, 2016

Adapting To Situations Involving Family Dysfunction

Mortgage2Dealing with dysfunctional families can be a difficult job for a financial advisor. A good advisor will need to learn how to adapt and modify their strategy to deal with any given number of possible situations. Litigation involving wills or trusts can get complex and expensive, and a good financial advisor should be able to avoid these types of situations with careful estate planning. Tangible personal items that might not have a lot of monetary value might have important sentimental value to certain family members, and it will be extremely important to plan ahead for these type of personal items in any estate planning. Advisors will need to help family members communicate with each other so that they can agree to a plan and avoid costly legal battles in the future.

See Keith A. Davidson, Family Dysfunction Takes a Different Approach: Adapt and Modify, Albertson & Davidson LLP, January 7, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

January 18, 2016 in Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Saturday, January 16, 2016

A Review Site That Financial Advisors Should Know About

Grading advisorThe internet is making it easier for clients to be less personal and more objective when looking for an advisor, and there is one review site in particular that financial advisors should be aware of. “Enter GradeMyAdvisor.com, a site that aims to rate advisors objectively based on portfolio performance and the risk taken to achieve that performance.” The website judges a professional’s competency as an advisor and uses many of the same analytics that firms often use to evaluate their own advisors. The service is free and private for investors which means that advisors are going to be unaware if their client is using the service. Some experts have expressed concerns that this online service could easily backfire for advisors. Regardless of one’s opinion on the benefit of this service this is something that financial advisors should know about.

See Zina Kumok, GradeMyAdvisor: What Advisors Should Know, Investopedia, January 15, 2016.

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

January 16, 2016 in Estate Planning - Generally, Professional Responsibility, Web/Tech | Permalink | Comments (0)

Thursday, December 31, 2015

How The DOL Fiduciary Proposals Will Impact The Annuities Industry

Charitable trustUnder a new proposal for financial planners created by the Department of Labor (DOL) all advisors and salespersons will be automatically elevated to level of fiduciary. This will mean that they will have to disclose any compensation that they earn from the sales or services that they provide to their clients. If these new proposed regulations are implemented this will have a huge impact on the annuity industry. There is opposition to these new proposals from within the industry with claims that the new requirements will lead to higher costs. Congress will have to eventually decide on whether to adopt the DOL proposals. People within the annuities industry that will be impacted by these proposed regulations will be eager to find out what the outcome is.

See Mark P. Cussen, What the Fiduciary Proposal Means for Annuities, Investopedia, December 31, 2015.

December 31, 2015 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

Thursday, December 24, 2015

Attorneys, Accountants, And Financial Planners Face Liability Concerns About IRA Advice

Business_expenseA large number of Americans have individual retirement accounts (IRAs) that estate planners often use to help their clients manage assets. There are many estate planning attorneys, accountants, and financial planners that have to face headaches about the potential for liability over their management of a client’s IRA account. This article provides examples of hypothetical situations where different estate planning professionals encounter issues that cause them to become open to personal liability. The rules and regulations governing traditional IRAs, Roth IRAs, taxes, and all of the other issues dealing with IRAs can be very complex and very few individuals are gurus in this subject material. People that are involved in a profession dealing with IRAs or estate planning in general should use prudence and caution when making decisions.

See Seymour Goldberg, New Liability Concerns for Accountants, Financial Planners and Attorneys Regarding IRA Advice, Accounting Today, December 23, 2015.

December 24, 2015 in Elder Law, Estate Planning - Generally, Malpractice, Professional Responsibility | Permalink | Comments (0)