Wills, Trusts & Estates Prof Blog

Timeshare Complaints Rising

According to a Consumer Complaint survey, timeshare owners were defrauded out of over $14 million last year as a result of fraudulent operations, becoming one of the fastest-growing complaints.

Some complaints arise out of timeshare companies offering “prizes” they never intend to give away while other owners get stuck paying annual maintenance fees that management companies promised to cover.  Timeshare owners who try and sell their units often run into “resale companies” that run off with upfront fees as well as “resale recovery services” that promise to track down the “resale company” but instead run off with more upfront fees.

Those living in retirement communities or assisted living facilities face similar problems.  Many communities tell unit owners they can recover a large amount of their entrance fee if they move out or die.  These refunds are often delayed or never paid as retirement communities wait to fill the vacancy or instead use the vacancy as a “sales model.” 

Scammed consumers should contact their local consumer protection agency in order to raise awareness of these fraudulent practices.

See Caroline Mayer, Watch Out for Timeshare, Retirement Home Scams, Forbes, June 6, 2013.

Australian Zoo in Middle of Legal Dispute

The adopted son of Maurice John Bade wants a piece of the $650,000 bequest to the Royal Zoological Society, the organization behind the Adelaide and Monarto Zoos in South Australia. 

Michael Thomas Bade, 59, claims he was left without adequate support and should be entitled to a larger share of his father's estate after being left only $14,000 in his father’s will.  However, the Society believes it is a worthy beneficiary, claiming it will apply the donation to combat their $20 million debt and help save species from extinction.

See Loukas Founten, Son Seeks Greater Share of Zoo Bequest, Australian Broadcasting Company, June 7, 2013.

Inheritance Awareness Campaign for Afghan Women

A campaign sponsored by the U.S. government consisting of ads and workshops in the Kabul province is trying to spread the word that women are entitled to a share of their deceased husband’s property. 

In Afghanistan, very few people leave wills or know the law.  Even if women are aware that their inheritance rights are being ignored, few object due to family dynamics.

The program seems to be working as dozens of women being taken advantage of by their male relatives are seeking assistance in recovering their rightful inheritance.  The program is also reaching out to men, who in many cases do not know women are entitled to inherit. 

According to the U.S. Agency for International Development’s Land Reform, the entire program cost less than $74,000, and the agency hopes to continue the education campaign in other provinces.

See Jay Price, In Afghanistan, Women Denied Their Inheritance Now Have a Champion, McClatchy, June 4, 2013.

New Evidence Implicates Chinachem Members of Breaching Their Duty

Nina Wang was Asia’s wealthiest women for almost thirty years before she died in 2007. Recently, her last assistant, Ringo Wong Lai-chuen, provided the police with some evidence implicating members of Chinachem of obstruction of justice. Wong was quoted in the China Morning Post stating, “They are people who were barely noticed in the past, but climbed to higher positions.” Wong has also questioned how Chinachem Group has administered the Chinachem Charitable Foundation which was inherited a hefty sum from Wang’s will. Additionally, Wong suspects Nina Wang’s late husband, Teddy Wang Teh-huei, would mismanage Nina’s estate. However, despite the new evidence the police have not opened a new investigation. Police are waiting for more supporting documentation from Wong. He is expected to provide that information soon. 

See Nina Wang's Assistant Gives Police 'Evidence', Estate of Denial, Jun. 8, 2013.

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

Article on Applicable Law to Succession Upon Death in the European Parliament

Isabel Rodriguez-Uria Suarez (University of Santiago de Compostela) has recently published an article entitled, The Applicable Law to Succession Upon Death in the New Regulation (EU) No. 650/2012, (April 2013).  Provided below is the abstract from SSRN:

This paper analyzes the applicable law to the succession mortis causa as defined by the Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession. The general rules determining the lex successionis and the special rules setting out the applicable law to wills as well as the agreements as to succession are the main subject of this article. The scope of the aforementioned laws is also analyzed thoroughly.

Same Sex Couples in Germany Granted Same Tax Benefits as Married Heterosexual Couples

Same sex couples have won a few victories in Germany. Recently, the highest court in Germany ruled that same sex couples can receive the same tax benefits as married heterosexuals. The ruling did not please a group of conservatives supporting Chancellor Angela Merkel who is up for reelection in three months. In August of last year, Merkel refused to allow same sex couples receive the same tax benefits enjoyed by married heterosexual couples. However, her democratic supporters were anxious to grant same sex couples with equal tax benefits. Foreign Misiter Guido Westerwelle describes his feelings regarding the change in the law saying the holding shows that the law is finally catching up with society and its changes. That is not the only change in German law. This past February, the Constitutional Court held that a member of a civil union could adopt their partners child. This law will be effective in 2014.

See Scott Roberts, Angela Merkel Told to Equalise Tax Benefits for Gay Couples in Constitutional Court, Pink News, Jun. 6, 2013. 

The Supreme Court of Canada Refused to Hear Sperm Donor Case

In Vancouver, Olivia Pratten failed in her attempt to have the Supreme Court hear her case regarding sperm donation and access to information on the donor. Her argument was that kids conceived through donated sperm should have the same options as children who are adopted.  Since 1996, adopted children have been able to learn information about their biological parents. Children are able to access medical history and other information. She took on the case to have the law get on board with different reproductive processes. Pratten stated "This is an area that has no legislation on it, and there's more people who are conceived this way." The B.C. Supreme Court agreed holding that anonymous sperm donors could be “harmful to the child”. However, the B.C. Court of Appeals overturned the lower courts ruling. Pratten appealed to the Supreme Court of Canada to interfere, but the court said it would not hear the case. 

See Olivia Pratten Sperm Donor Case Won't Be Heard By Supreme Court, HuffPost British Comumbia,  May 30, 2013.

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

66-Year-Old Case Over Land & Honor

Today fourth generation petitioners are arguing a 66-year-old case over land ownership. In 1947, right before India declared its independence as a country, Biseshwar Singh filed suit against Har Govind Rai. The dispute arose over a plot of land that both families claim to own. Singh states that his family has spent over 2 million rupees over the 66 years in this legal battle. The land in dispute is worth only 15,000 rupees. However, now the families claim the dispute involves honor and status in the community. There are millions of pending cases in the India district courts. Moreover, there is a problem with judge vacancies. Lawyers from both sides speculate that the solution will have to come from a settlement agreement that does not seem likely. 

See Panta Bihar, India Bihar Families Fight for 66 Years Over a Plot of Land, BBC News India , May 27, 2013.

Protecting Female Inheritance In Islam

Inheritance is a very sensitive issue in Islamic Law because it is often confused with different traditions. As a result, many women are not given their full inheritance rights. Recently, female participants of the “Women, Commercial Inheritance and Family Rule” conference created an independent body to protect their legacies. This independent body functions much like a judicial proceeding and encourages the protection of female inheritance. The conference highlighted women’s rights and how a speedy inheritance can prevent family battles. Additionally, the conference focused on the female role in the economy and how valuable it is for women to create strategic alliances. 

See Call for Setting Up Judicial Body to Protect Female Inheritance, Estate of Denial, May 24, 2013.

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

Cross-Border Marriages Are Rising Along with Legal Hassles

In 2010, nearly five million Americans were married to someone born in a different country, a rising trend also found in a number of other countries.

International tax and estate planning issues coincide with this trend.  Some common issues include increased taxes, different tax rules, restrictions on property ownership, and inheritance cuts. 

One of the biggest issues in America is the unlimited marital-deduction privilege, which allows U.S. citizen spouses to transfer each other money tax-free.  However, if a spouse is a citizen of another country, this could trigger a steep federal estate tax, which in some cases can reach nearly 40 percent.

Cross-border couples must also be aware of the increased difficulties that arise upon divorce, including the enforcement of child custody and calculating the correct tax deductions for spousal and child support.

See Neil Parmar, A Global Love Affair, The Wall Street Journal, May 21, 2013.

Sibling Rivalry Over Dad's Millions

Recently in the UK, a sibling rivalry has arisen over the distribution of Antony Lambton’s multi-million pound estate. Ned Lambton, son of Antony, has been arguing with three of his five siblings about their inheritance from his deceased father. British law states that the oldest son receives the entire estate. However, the three sisters are trying to apply Italian law because Antony lived there for over 30 years. Ned has been in negotiations with his three sisters and is trying to settle the claim for one million pounds each. Moreover, he has also has issued a writ to ask the court not to apply foreign statutes. Ned’s lawyers claim that Antony left his estate to his son because he had already maintained and supported his daughters while he was alive. 

See Michael Brown, Sisters of the Earl of Durham Launch Court Action Over Inheritance, The Journal, May 20, 2013.

Gun Trust Transfers

Gun owners in the process of moving while completing a Form 4 or Form 1 can face problems with transferring their guns to their new residence in a different state. It is important to note that these problems will not arise if the individual is moving to a new in-state residence. The following circumstances are problems that are related to tax stamps involving gun trusts. 

A gun owner could face problems if he moves to a state where the gun is illegal or if the gun owner lacks the proper qualification to complete the purchase in his previous state. For example, some states require that the person purchasing the item be a resident of that state. This requirement can be circumvented if the purchaser has a co-trustee who still lives within the seller's state. Even if the purchaser does not have a co-trustee, the ATF may be able to help him with the transfer; however, this is not a reliable solution. It is important to remember, however, that there are some items these rules do not apply to; therefore, even if a purchaser is moving to a different state, he should have no problems buying these types of guns.

See David Goldman, What If I Move Before ATF Approves My Form 4 or Form 1, NFA Gun Trust Lawyer Blog, Apr. 11, 2012. 

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

The New Retirement Options

Senior citizens today are now choosing alternative retirement options over the traditional retirement and assisted living homes. These alternative retirement options give senior citizens the ability to enjoy their retirement in appealing settings without having to worry about their health or safety. The different options include offshore retirement communities, co-housing with their children, permanent cruises, and living within a spa. Each provide all the necessities of life that these individuals need to enjoy their retirement in luxury and comfort.

See Kelly Greene, The New Retirement Resorts, Wall Street Journal, Mar. 16, 2012.

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

Advice on Inherited Jewels

Many people who inherit jewelry do not know where to find advice on what to do with the pieces they inherited. One option is to visit an auction house (the auction house may come to you if the inheritance is valuable enough). The auction house will value and sale your pieces. The advantages of using an auction house are that most estimates are free, appraisers will suggest the appropriate time to sell your jewelry, and your pieces will be exposed to a wide market, including collectors and dealers. The drawback to using an auction house is that premiums for both sellers and buyers have risen. This means that both the buyer and seller will inevitably “lose” on the price. Additionally, a client can pay up to 10% to the company brokering the sale.

Another option is to sell directly to a dealer. Getting advice from a jewelry specialist can help ensure that a dealer does not give you a poor deal. Some of these advisors will advise clients on available offers, opine as to whether the pieces should be sold at auction or privately, and will sometime even educate clients on the art of jewelry.

See Maria Doulton, Maximising assets: Top tips on what to do with inherited jewels, Financial Times, Jun. 10, 2011.

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

Ten Bargain Retirement Locations

Declining home values can devastate homeowners but create bargains for retirees looking for homes in new areas. Ten places where the average home prices are falling fast are listed below:

1. Portland, OR
   • Average home sale price in 2010: $270,418
   • Average home sale appreciation between 2009 and 2010: -91.5 percent
2. Tallahassee, FL
   • Average home sale price in 2010: $220,135
   • Average home sale appreciation between 2009 and 2010: -91.48 percent
3. Tucson, AZ
   • Average home sale price in 2010: $147,731
   • Average home sale appreciation between 2009 and 2010: -88.06 percent
4. Wake Forest, NC
   • Average home sale price in 2010: $240,801
   • Average home sale appreciation between 2009 and 2010: -87.53 percent
5. Cathedral City, CA
   • Average home sale price in 2010: $182,076
   • Average home sale appreciation between 2009 and 2010: -85.16 percent
6. Wahiawa, HI
   • Average home sale price in 2010: $331,498
   • Average home sale appreciation between 2009 and 2010: -82.13 percent
7. Weatherford, TX
   • Average home sale price in 2010: $131,586
   • Average home sale appreciation between 2009 and 2010: -77.83 percent
8. Dover, DE
   • Average home sale price in 2010: $168,805
   • Average home sale appreciation between 2009 and 2010: -66.26 percent
9. Sycamore, IL
   • Average home sale price in 2010: $168,053
   • Average home sale appreciation between 2009 and 2010: -48.49 percent
10. St. Charles, MD
    • Average home sale price in 2010: $245,191
    • Average home sale appreciation between 2009 and 2010: -45.66 percent

Emily Brandon, 10 Bargain Retirement Spots, U.S. News, Feb. 26, 2011.

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this to my attention.

Assembling the Global Baby

In a hospital room in Crete, a Bulgarian woman will deliver a baby whose biological father is Italian, biological mother is an anonymous European, and whose birth is being arranged from Los Angeles.

Rudy Rupak, chief executive of PlanetHospital, searches the globe to find all the components for his business of creating “global babies.” India has become a magnet for his line of business due to legalized surrogacy since 2002, an ample supply of surrogates and egg donors, and few regulations on surrogates.

PlanetHospital’s services range from $32,000 to $68,000 compared to $200,000 for a surrogate in the United States. In addition to the monetary benefits, surrogates in poorer countries have few legal rights to the baby, meaning that the surrogate is less likely to try to legally claim the child she’s carried. Finally, PlanetHospital’s services can assist couples who aren’t able to adopt in the United States due to age, homosexual status, or other obstacles.

The process also has its drawbacks. Sometimes the clinic creates more than one fetus, forcing the parents to decide whether to abort or have multiple babies. Further, some babies have trouble acquiring a passport.

“Mr. Rupak is a pioneer in a controversial field at the crossroads of reproductive technology and international adoption.”

Tamara Audi and Arlene Chang, Assembling the Global Baby, W.S.J., Dec. 10, 2010.

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

N.Y. Court Allows Distributions to Two Widows

A summary of In re Estate of Diba, 2010 WL 2696611 (N.Y. Sur. 2010), provided by Bruce S. Johnson (Thomas J. and Mary E. Heck and Leo H. Faust Memorial Designated Professor of Law, Moritz College of Law), is below:

The decedent, a resident and citizen of Senegal, fell down an elevator shaft in New York City. The wrongful death suit was settled.  According to New York's statute of descent and distribution, a portion of these proceeds goes to the decedent's surviving spouse. Thus the question: what happens when the decedent has two spouses, which is entirely legal in Senegal, but where another NY statute bars distribution to spouses of a bigamous marriage?

The Surrogate Court ruled that since bigamy is legal in Senegal, and since the decedent was a citizen and resident of Senegal, the spousal share could be shared by the two widows. The Guardian ad litem for the children did not object as the ruling did not reduce the share going to the children. 

Estate Planning for Those Who Live Abroad

Estate planning can be further complicated when an individual lives in or owns property in a different country. Some governments have forced-heirship rules, requiring that certain portions of an estate go to certain family members. Further, expatriates are usually subject to local inheritance law with regard to local real estate. The will usually controls everything else.

Here are some tips for Americans living overseas:

• Execute a U.S. will as well as a local will drawn up by a local attorney
• Own as little property as possible in the country of temporary residence
• Use trusts (or the equivalent of a trust in other countries) to keep assets out of your estate, avoiding forced heirship
• Focus on the country where you have the most assets because sometimes you can’t perfect your estate plan

See Conrad De Aenlle, Estate Planning Step 1: Recognize You are Going to Die, N.Y. Times, July 15, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.

Palumbo Family Feud Over Money

Lord Palumbo of Walbrook has been arguing with his children about money for a quarter of a century. In the last courtroom brawl fifteen years ago, Palumbo’s three children from his first marriage claimed that Palumbo had improperly spent money from a £70m family trust set up by his own father.

Palumbo’s children’s latest claim alleges that Palumbo has been lying about missing trust property which he actually sold and used the proceeds for himself. His children claim the original trust agreement does not give Palumbo the right to dispose of the items. They want him removed as trustee and to conduct an accounting of the trust assets.

See Mark Hollingsworth and Caroline Davies, Palumbo Children Accuse Father of Extravagance as Family Feud Resumes, guardian.co.uk, July 27, 2010.

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

Liechtenstein is no Longer a Tax Haven

Prince Maximillian of Liechtenstein has become part of a plan to extract taxes owed to Britain from its opaque bank accounts. Starting in September, every Liechtenstein bank account will be subject to a mandatory tax audit.

Rather than taking their money and fleeing from Liechtenstein, tax avoiders are rushing in to pay their taxes. They’re taking advantage of the amnesty under which only 10 years of tax is payable rather than the customary 20 years. Further, these tax avoiders can remain anonymous.

Prince Max doesn’t think that offshore banking will disappear though. In his opinion, “[t]he advantages are far more than tax evasion. The world is never stable and we offer diversity for investors in terms of assets, institutions, jurisdictions. Liechtenstein is stable, we have a strong Swiss currency and no deficit."

Louise Armistead, Liechtenstein’s Heir Backs Radical New Tax Plans, Telegraph.co.uk, July 17, 2010.