Wills, Trusts & Estates Prof Blog

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

Saturday, August 27, 2016

Possible Agreement Reached Between Shari Redstone and Her Niece

Shari redstoneThe white flag has been waved in the family feud between Shari Redstone and her niece Keryn Redstone. The issue between the two family members resulted from changes made to Sumner Redstone’s trust. Keryn, a beneficiary of the trust, claimed that her aunt was making the changes to the trust not Sumner. However, a tentative settlement was reached on Friday, which could put this family feud to rest. In that hearing, Sumner’s lawyer agreed to give Keryn the assurance that she was being treated equally amongst the grandchildren under the trust document.

See Joe Flint, Possible Accord Reached in Family Battle Over Sumner Redstone Trust, Wall Street Journal, August 26, 2016.

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

August 27, 2016 in Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, August 26, 2016

Inheriting Vacation Homes

Vacation homeVacation homes are places for families to make everlasting memories, but parents are often shocked to learn that their kids are indifferent to their inheritance. With proper planning, however, a vacation home transfer can keep a family’s memories alive for generations to come. Communication amongst the family can help promote more thoughtful decisions for the future of the vacation home—either preserving the home throughout generations or selling it. Vacation homes can involve unwanted maintenance, so families need to discuss any potential concerns.

There are several ways to transfer a vacation home property, including being jointly owned by the children or transferring to a limited liability company or trust. Parents who plan to hold on to the property until they die find it best to place the transfer in trust. Parents can even set aside funds to care for the maintenance on the property, making it more enjoyable for their children.

See Liz Skinner, Surprising Trials of Passing Down Vacation Homes, Investment News, August 23, 2016.

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

August 26, 2016 in Estate Administration, Estate Planning - Generally, Travel, Trusts | Permalink | Comments (0)

Thursday, August 25, 2016

Article on Trust Law & Nigerian Pension Law

Pension reform actNuel Chinonyelum Oji recently published an Article entitled, An Appraisal of the Concept of Trust in the Nigerian Pension Reform Act 2014, (2016). Provided below is an abstract of the Article:

Prior to 2004, the administration of pension in Nigeria was largely marked by the non-contributory defined benefit scheme. With the coming into force of the Pension Reform Act 2004, the Nigerian pension system was, to say the least, overhauled. A contributory pension scheme was established for every employee under the Pension Reform Act 2004. It also brought along with it a triangular relationship of the employee, pension fund administrator and pension fund custodian. The pension fund administrator was made the exclusive manager of the fund while custody of the funds was the preserve of the pension fund custodian. Though not immediately visible, the concept of trust was central to the relationship between the pension fund administrator, the pension fund custodian and the employee. In 2014, the 2004 Act was repealed and a new Pension Reform Act enacted. However, the concept of trust remained unaffected. This work, therefore aims at examining the relationship between the law of trust and Nigerian pension law. It seeks to unveil the meaning of pension trust with a painstaking analysis of the nature, parties, advantages, breach and remedies of the pension trust created under the Pension Reform Act 2014.

August 25, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Monday, August 22, 2016

Resolving Personal Jurisdiction Matters in Florida

JurisdictionA Florida court will typically analyze two questions when resolving issues of personal jurisdiction—whether personal jurisdiction exists over the non-resident defendant under the state long-arm statute, and whether that exercise of jurisdiction violates the Fourteenth Amendment. In Abromats v. Abromats, a Florida court engaged in this analysis, considering a motion to dismiss for lack of jurisdiction. Accordingly, the court determined that it had in rem jurisdiction because it was the trust’s principal place of administration and the trustee had not provided notice otherwise. Also, the court concluded that it had jurisdiction over the defendant, using the analysis above. The conferred jurisdiction of the trust’s principal place of administration satisfied Florida’s long-arm statute.

See Brian Spiro, Pleading Florida’s Long-Arm Statute in Federal Trust Dispute, Florida Probate Lawyers, August 19, 2016.

August 22, 2016 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Saturday, August 20, 2016

Wildenstein Mansion Relisted for $100 Million

WildensteinIn 2014, the Wildensteins, a billionaire art dealing family, decided to sell their 21,000-square-foot townhouse in New York, acting as their art gallery. They agreed to sell the townhouse for $90 million to the Qatar government, which would give them some liquidity for dealing with their $500 million tax case in France. Qatar ended up pulling out of the deal one day before closing, citing violation of money laundering laws by the Wildensteins. After suit was filed, the Wildensteins claimed that Qatar reneged on the deal due to being uncomfortable over the publicity of the record-breaking sale price. The case was settled out of court in May 2016, and the townhouse was taken off the market. Now, the townhouse is back of the market listed for $100 million or a long-term lease. This property is one of several that the Wildensteins are trying to unload; however, they are not selling any artwork for their pending tax case.

See James Tarmy, Scandal-Plagued Wildenstein Mansion Back on Market for $100 Million, Bloomberg, August 17, 2016.

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

August 20, 2016 in Current Events, Estate Planning - Generally, New Cases, Trusts | Permalink | Comments (0)

Friday, August 19, 2016

CLE on International Trust & Estate Planning in Washington, D.C.

CLEThe American Law Institute is hosting a CLE entitled, 19th Annual ALI CLE Advanced Course of Study on International Trust and Estate Planning, which will take place on October 27–28, 2016, at the Washington Plaza Hotel in Washington, D.C. at 10 Thomas Circle. Provided below is a description of the event:

The two-day program provides an in-depth review of the factors to consider when providing tax and estate planning advice to wealthy individuals and families with U.S. and foreign contacts. Some of this year’s important topics include:

  • U.S. tax rules applicable to foreign “grantor” and “non-grantor” trusts
  • Common Law trusts and their analogues in other legal systems
  • Trust and related tax law developments outside the United States
  • Practical advice for clients with foreign trusts and business interests
  • Update of current multinational initiatives impacting cross-border wealth and tax planning
  • New options for international charitable planning and related developments
  • S. immigration and citizenship rules relevant to estate planning
  • The current “mark-to-market” expatriation tax rules, including the proposed section 2801 “inheritance” tax regulations
  • The effect that the international exchange of beneficial owner information embedded in CRS and FATCA is likely to have on cross-border tax and estate planning

As in past years, the course’s distinguished faculty will use interactive panels to address the latest wealth planning strategies and trends. There will be ample time to discuss your questions with the faculty and to network with them and a national audience of your peers.

August 19, 2016 in Conferences & CLE, Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0)

Monday, August 15, 2016

Article on the Role of Marital Presumption in Inheritance Law After Obergefell

Same sex inheritancePaula A. Monopoli recently published an Article entitled, Inheritance Law and the Marital Presumption After Obergefell, 8 Est. Plan. & Community Prop. L.J., 437 (2016). Provided below is a summary of the Article:

In the summer of 2015, the country saw a sea change in the rights of same-sex couples to marry. With Obergefell v. Hodges, the United States Supreme Court made clear that states could not prohibit same-sex marriage. Obergefell created ripple effects in a number of doctrinal areas, including inheritance law.

From an inheritance law perspective, Obergefell raises questions about the current nature of the marital presumption. That doctrine--that a child born during an intact marriage is presumed to be the child of the husband--does significant work in inheritance law. The marital presumption provides an efficient resolution of the central question for probate courts in estate administration--is there a parent-child relationship between the decedent and a person claiming a share of the decedent's estate? Every state has a version of the marital presumption and, although it is no longer irrebuttable in the vast majority of states, it is still a powerful presumption that resolves the question in the majority of cases.

With the advent of same sex-marriage as a right in every state, there are a number of interesting questions about the future of the marital presumption. Does Obergefell reify marriage and thus the presumption? And is that bad policy? For those who argue that the presumption privileges marital children, should they redouble their efforts to eliminate the marital presumption altogether? Should states revise statutes to reflect the fact that a woman may now be the nonbirth spouse trying to establish a parent-child relationship using a presumption built specifically for men? Should those in inheritance law separate the definition of the parent-child relationship for their purposes from its definition for family law purposes?

This article focuses on the last question--the role of the marital presumption in inheritance law after Obergefell. It describes several illustrative cases that have arisen in the family law context, reviews the courts' analysis, and suggests that a conclusive marital presumption be extended to all nonbirth/nongenetic spouses for purposes of inheritance law. Since our system of inheritance law is status-based, establishing the parent-child relationship is the key to determining whether someone inherits through intestacy or when there is a class gift in a governing instrument like a will or trust. This article takes the position that Obergefell mandates extension of the current presumption to same-sex, nonbirth/nongenetic spouses in both family law and inheritance law.

August 15, 2016 in Articles, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Florida Probate Courts' Authority Over Out-of-State Real Property

Out of stateFlorida probate and trust cases can sometimes involve out-of-state real property. Many people assume that issues dealing with out-of-state real property must be addressed by a court located in the state where the property is located. The distinction, however, is drawn between a court ruling on the real property itself and a court ordering a defendant to act concerning the real property—the former is not permitted, but the latter is. This is referred to as the local action rule. Accordingly, if the real property is the primary dispute with parties seeking to act directly, the action is classified as in rem, proceeding only in the state where the property is located. On the other hand, because Florida courts have personam jurisdiction, they can order a defendant to take action against the land. These suits are grounded in equity, resulting in a defendant who has unlawfully acquired a deed transferring out-of-state real property being ordered to convey the property back to the real owner. 

See Anya Van Veen, Florida Probate Court Can Order Return of Decedent’s Out-of-State Real Property, Florida Probate Lawyers, August 12, 2016.

August 15, 2016 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article on the Fear of Fiduciary Duty as a Trust Protector

Trust protector2Alexander A. Bove, Jr. recently published an Article entitled, A Protector by Any Other Name . . ., 8 Est. Plan. & Community Prop. L.J., 389 (2016). Provided below is a summary of the Article:

The trust protector has rapidly become one of the most popular and valuable tools for estate planning attorneys today. The problem has been, and remains, that there are two opposing schools of thought in its use. One is that the protector may or may not be declared a fiduciary regardless of its powers. The other is that that position in almost all cases is so integral to the proper administration of the trust that with very limited exception the law should per se regard the protector as fiduciary. This discussion, which emphatically supports the latter position, focuses expressly on that issue, and was in large part motivated by and is offered in response to a plenary presentation on the subject at the 2015 Heckerling Institute on Estate Planning. That presentation essentially declared that the protector will or will not be a fiduciary depending upon the name given to the position under the terms of the trust, without regard to the impact of his powers on the beneficiaries or the purposes of the trust, and without regard to the intent of the settlor. This discussion points out the basic lack of support for such an approach and analyzes the protector's important role in a trust, concluding that with one specific exception, the law has to regard the protector as a fiduciary. This discussion further considers the state laws concerning protectors, which generally reflect either a lack of understanding or a lack of concern about fiduciary law, and explains that the only real impact of such laws on the issue is made by those few states which provide that the protector is regarded as a fiduciary, regardless of a statement in the trust to the contrary.

There is little question that the trust protector is here to stay. Estate planners may not use them in every trust, but few would argue against their unique value to long-term and dynasty trusts, and many life insurance trusts, if not more. For this reason, it is extremely important that estate planning professionals must accept and assume the responsibility to effectuate clients' objectives in a manner consistent with established principles of law and consistent with the best interests of trusts and beneficiaries, rather than in a manner designed to produce the least exposure to liability of parties who are appointed to implement the client's plans.

The thrust of this discussion is to discourage the tendency on the part of practitioners from thinking that a party who holds fiduciary powers, or is in a fiduciary position and placed in that position of trust and confidence by the settlor, may be relieved of all fiduciary duty simply by stating in the trust that he is not a fiduciary. This “fear of fiduciary duty” has been blown way out of proportion. To be a fiduciary is not a curse, and if exposure to liability is the motivating concern for that fear, such exposure can be reduced to a minimum, as discussed later, but it cannot be drafted away completely. This is not to say that a protector may never act in a non-fiduciary capacity, as illustrated later in the discussion, but such cases are unique and contrary to the inherent nature of the trust protector's role.

August 15, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Sunday, August 14, 2016

Estate Planning for Blended Families

Blended familiesBlended families are becoming increasingly common, and it is important to plan both your finances and estate accordingly. The most common mistakes are divorcees not updating their wills and changing beneficiaries on accounts upon entering into a new marriage; this can be detrimental to an estate plan. Blended families should choose appropriate executors for their estate that will work together to carry out each individuals’ wishes. They must also find a way to effectively distribute their assets; trusts are great vehicles to solidify the particular outcome of every individual. Furthermore, it is a good idea to consider life insurance as an inheritance for beneficiaries, so that the estate is available for a potential surviving spouse. And, if we are learning from past mistakes, marriage contracts may not be a bad idea for your estate plan either. 

See Tony Maiorino, Five Ways to Navigate Blended-Family Finances, Advisor.ca, August 3, 2016.

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

August 14, 2016 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)