Wills, Trusts & Estates Prof Blog

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

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Wednesday, March 4, 2015

Article on Trusting Trust

Deborah gordon

Deborah S. Gordon (Drexel University Thomas R. Kline School of Law) recently published an article entitled, Trusting Trust, Kansas Law Review, Vol. 63 (2015); Drexel University Thomas R. Kline School of Law Research Paper No. 2015-A-01.  Provided below is the abstract from SSRN:

What is a trustee and how should we understand her duties? The existing literature typically identifies the trustee in the role of agent, partner or contracting party. This Article re-envisions the trustee in the role of the legal system’s most trusted type of decision-maker: the common law judge. Rather than argue for a top-down recreation of the trustee’s role, this Article contends that valuable lessons can be learned by reconceptualizing how trustees, settlors, and beneficiaries view themselves and each other. Using traditional literature about great judging as a touchstone, the Article argues that those qualities essential to principled adjudication — including candor, competence, integrity, and impartiality — offer fresh insights for trust creation and administration and shed light on certain internal trust governance dilemmas. The Article’s normative claim is that analogizing trustees to judicial surrogates — arbiters, interpreters, problem-solvers, mediators, and communicators — will provide a way to build greater confidence in what might be called a trust community that originates with the settlor but is perpetuated by the trustee and beneficiaries as they function in the lived world.

March 4, 2015 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 3, 2015

CLE on Effective Use of Trust Protectors

CLEThe American Law Institute Continuing Legal Education (ALI CLE) is presenting a CLE entitled, Effective Use of Trust Protectors: An Evolving Role, Tuesday March 24, 2015, 12:30 – 1:30pm, online and by phone.  Here is why you should attend:

Not all roles for trust protectors are the same.  Issues can arise that need to be clearly, directly and completely addressed when designating a trust protector to serve.

Are there drafting traps that can cause issues when using trust protectors? How can a planner deal appropriately with the question of fiduciary liability? How do state statutes affect appointments of trust protectors?

Learn the latest developments in the role and use of trust protectors in this fast-paced discussion among estate planners with decades of experience interpreting complicated trust laws.

Topics to be discussed include:

  • How state statutes affect the use of trust protectors
  • Drafting tips to outline the scope of trust protector powers and duties
  • How the use of alternate decision makers impacts the administration of trusts

March 3, 2015 in Conferences & CLE, Trusts | Permalink | Comments (0) | TrackBack (0)

Saturday, February 28, 2015

Drafting a Trust Amidst Divorce

Divorce 2

While marriage can be wonderful, it can also be difficult.  Unfortunately, some couples encounter hurdles in their relationship from which they may never recover. 

Regardless as to whether the split is acrimonious or harmonious, leaving trust assets on the table during negotiations can enable the parties to make beneficial deals that will protect family business interests or other assets from division.  The goal should be to plan for divorce with flexibility to maximize a divorcing couple’s options, while also protecting what divorcing settlors would want. 

A big concern is that the settlor in the divorce action will not want their spouse to automatically continue as trustee or beneficiary with no safeguards.  A refined solution involves two provisions: First, upon the filing of a divorce action, the trust instrument default should automatically remove the spouse as trustee appointer and trustee remover only.  That way, a successor in line can remove the spouse as trustee if that’s desired.  The spouse can also remain as fiduciary if appropriate.  Second, someone should be empowered in the instrument to exercise a power to add or remove beneficiaries like a divorced spouse.  This combined approach can achieve all that most divorcing clients would want without limiting flexibility for the minority of clients whose divorce wishes may be atypical.

See Kim Kamin, Planning for Divorce When Drafting a Trust, Wealth Management, Feb. 27, 2015.

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

February 28, 2015 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Court Halts Proceedings in James Brown Estate

James Brown 2

I have previously discussed the ongoing estate battle between soul singer James Brown, and his alleged wife Tommie Rae Hynie.  The South Carolina Supreme Court has now ordered Aiken County court officials to stop all proceedings in the cases regarding Brown’s estate.  The order told the Aiken County Clerk to give the high court all orders issued in any action related to the James Brown estate and the marital status of Brown and Hynie. 

This order could indicate that the South Carolina Supreme Court wants to reevaluate the case, as there are many questions that need to be answered.  Yet, the lawyer for Brown’s family said the order “puts the whole case in limbo and stops everything in its tracks until the Supreme Court gives direction.”  The legal dispute has also put Brown’s foundation on hold, which was supposed to provide education to poor children in South Carolina and Georgia. 

See The Associated Press, SC Supreme Court Freezes James Brown Estate Case, The State, Feb. 26, 2015.

February 28, 2015 in Current Affairs, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, February 27, 2015

Doctors Chosen to Examine Tom Benson

Tom BensonA three-doctor panel has been selected to determine the mental fitness of Saints and Pelicans owner Tom Benson.  The court has not released the names of the doctors, and the judge said that all of the information surrounding the exam would be confidential. 

The judge previously stated that each side would select a physician for the exam, with the two sides jointly agreeing on a third doctor.  The exam ordered is less invasive than the heirs had originally sought 

The doctors are scheduled to examine Benson in mid-March and a report will be filed with the court shortly thereafter. 

See Doctors Selected for Benson’s Exam, WWLTV, Feb. 26, 2015.

February 27, 2015 in Elder Law, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Income Tax Regulations Draw Attention at Heckerling

TaxesAs I have previously discussed, income tax issues were a major focus at the 49th Annual Heckerling Institute on Estate Planning. One area of focus was recent income tax guidance from the IRS relating to trusts and estates issues, including final regulations on Section 1.67-4, which discusses the 2-percent floor in connection to estates and trusts.

See Kevin Matz, A View From the Audience at Heckerling: Part III, Wealth Management, Feb. 26, 2015.

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

February 27, 2015 in Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, February 26, 2015

Tom Benson Denied Expedited Appeal

Tom Benson

The Texas Fourth Court of Appeals in San Antonio has rejected Tom Benson’s request for an expedited review of a lower court’s decision to temporarily oust the New Orleans Saints and Pelicans owner as steward of a trust created for his now-estranged daughter. 

In a motion filed Monday, Benson’s lawyers asked the court to speed up the usual 60-day briefing schedule, the reason being significant legal costs.  They wanted oral arguments set for seven days after his daughter, Renee Benson, files a brief in the appeal.  However, Court of Appeals denied the request on Wednesday without any explanation.

Benson is appealing the decision made by Bexar County Probate Judge Tom Rickhoff, who put the trust under the oversight of ex-San Antonio mayor Phil Hardberger and Art Bayer, a local attorney.  Benson’s lawyers argue that Rickhoff’s decision was problematic because less “harsh” remedies were not considered.  Hardberger and Bayern are each charging the trust $600 an hour — or a total of $9,600 daily — to handle decision-making responsibilities, money the trust will never recover.  

See Ramon Antonio Vargas, Tom Benson’s Request for an Expedited Appeal is Denied in Legal Battle Over Texas Trust, The Advocate, Feb. 26, 2015.

February 26, 2015 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

CLE on Practical Trust and Estate Planning


CLEThe American Law Institute Continuing Legal Education (ALI CLE) is holding a CLE entitled, Practical Trust and Estate Planning, on April 30-May 1, 2015 at the Marriot Fisherman’s Wharf in San Francisco, California.  Here is why you should attend:

Stay informed. Stay current. Give your clients the best advice a competitive estate planner can offer. Attend Practical Trust and Estate Planning!

Formerly Advanced Estate Planning Techniques, this long-running program features carefully selected, sophisticated topics that address some of the biggest issues currently faced by estate planning clients. Taught by experienced trust and estate practitioners and educators from around the country, this course will not only help you avoid common traps and pitfalls that often snare the unwary estate planner, but also help you develop the expertise you need to properly advise your clients.

February 26, 2015 in Conferences & CLE, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Accelerated Gifting

GiftsThe current estate tax climate has created a decreased focus on estate tax in estate planning, with the most recently available statistics showing that 99.7 percent of those who died in 2012 had estates that were below the exemption amount and the states that have an estate or inheritance tax only make up 38 percent of the U.S. population. This lowered estate tax focus has expanded charitable gift planning to include addressing concerns such as income tax, effective philanthropy, and asset protection. One way of addressing these concerns is through accelerating gifting by creating a Charitable Remainder Unitrust funded by appreciated securities or starting an endowment fund.

See Robert F. Sharpe, Jr., Making Gifts Sooner Than Later . . . Accelerating Charitable Bequests, Wealth Management, Feb. 23, 2015.

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

February 26, 2015 in Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Trustee’s Control of Entity Held in Trust Relevant to Removal Proceeding

GavelA beneficiary brought an action seeking removal of his mother as the personal representative of his father’s estate and as co-trustee with his brother, of his father’s testamentary trust. 

In In re Estate of Stuchlik, the Nebraska Supreme Court affirmed dismissal of all the actions relating to the estate because it was already closed but reversed and remanded on the issue of trustee removal based on the co-trustees’ management of a partnership in which the trust held both a minority limited partnership interest and a one percent general partnership interest.  Another one percent general partnership interest was held by the mother in her own right and together with the trust interest effectively gives mother all of the general partnership interest.

The Court reasoned that because trustees must deal with entities held in trust in the best interests of the beneficiaries, a trustee’s management of the entity may violate the duty of loyalty and the duty to act impartially between beneficiaries, and therefore is an appropriate subject of inquiry in a removal proceeding so long as the evidence offered pertains to the co-trustees’ actions in their capacity as trustees.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

February 26, 2015 in New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)