Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Tuesday, September 1, 2015

CLE On Trust Protectors For Trusts For Individuals With Special Needs

CLE PictureThe American Bar Association is presenting a CLE entitled, Trust Protectors for Trusts for Individuals with Special Needs: Not an Option Anymore - But Not Just Boilerplate, Monday September 21, 2015, 12:00-1:30pm Central, online.  Here are some details about the event:

ABA Members join RPTE for $70 to save $55 on this and future RPTE teleconferences, sign up at Register online. Find upcoming programming here . You may also email Michael.Kesler@americanbar.org, or call 312-988-5260. Visit www.shopaba.org to update your preferences to receive future program announcements via e-mail.

This program will be available on audio CD and MP3. Order from the ABA Web Store
(search by program title or keyword).

Cancellations and requests for refunds will be honored on the following basis: Two business days or more, 100% refund; one business day or less, 100% refund minus the $25 administrative fee. Substitute registrants are welcome. The ABA will seek 1.5 hours of CLE credit in 60-minute states and 1.8 hours of CLE credit in 50- minute states in states accrediting ABA live webinars and teleconferences.* Credit hours granted are subject to each state’s approval and credit rounding rules. NY- licensed attorneys: This non-transitional CLE program has been approved for experienced NY-licensed attorneys in accordance with the requirements of the New York State CLE Board for 1.5 New York CLE credits.

September 1, 2015 in Conferences & CLE, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Sunday, August 30, 2015

Tom Benson Continues Effort To Remove Heirs From Teams

BensonI have previously discussed the ongoing legal dispute between Saints and Pelicans owner Tom Benson and his jilted heirs.  Tom Benson is continuing his efforts to remove his children from ownership of the sports teams by suing the trustees overseeing the funds that hold his heirs’ stakes in the teams.  Benson claims that the way the trusts were set up permit a transfer of equivalent assets and the sports team owner transferred over $522 million in promissory notes to the trusts.  Robert Rosenthal, and attorney for the heirs, claims that Benson did not offer a fair trade in the transfer attempt.  This ongoing dispute is likely going to continue to play out in the future due to the high stakes that are involved. 

See Katherine Sayre, Tom Benson family feud: Saints, Pelicans owner continues push to remove heirs from teams, The Times-Picayune, August 28, 2015.

August 30, 2015 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Robin Williams’ Bike Collection Currently An Issue In Estate Dispute

Robin williamsI have previously discussed the battle over Robin Williams’ estate.  There is currently a legal battle brewing over a large bicycle collection that the late actor owned.  William’s was an avid biker and used to frequent bike shops on a regular basis.  The two disputing sides are expected to meet next week over this issue and many other unresolved conflicts.  Another ongoing dispute involves a disagreement over how much money should be placed into a reserve fund to maintain Susan Williams in the Tiburon home that she shared with her late husband. 

See Robin Williams’ Bikes Are An Issue In Estate Fight, ABC News, August 28, 2015.

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

August 30, 2015 in Current Affairs, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Some Issues To Consider When Creating Trusts For Troubled Adult Children

Trust AltWhen a family has an adult child that suffers from addiction or mental disease they will want to ensure that the child's well being is protected after the death of the parents. However, some precautionary steps should be taken to ensure that the child will be taken care of for the longest possible time. First, a trust that is established should have limitations set on the distributions made to the child with the problem. For example, distributions should be premised on need and remain within the discretion of the trustee since a fixed sum might provide more than is needed and help support an addiction.

In addition, a statement by the settlor explaining the circumstances of the child's problems should be provided so that future trustees known the circumstances behind the formation of the trust. Finally, serious consideration should be given to a trust that never distributes in full to the troubled child even if the mental condition or substance abuse remains dormant for years. Both problems may be triggered by unforeseen life events, even after years of successful treatment, which could lead to financial disaster if the corpus of the trust is in the child's hands. Ultimately a trust must be tailored to the reality of each situation with the history and severity of any afflictions being carefully considered when fixing the terms of the support trust.

See Paul Sullivan, For Parents With Troubled Adult Children, Financial Hurdles Abound, New York Times, August 28, 2015.

Special thanks to Matthew Bogin for bringing this article to my attention.

August 30, 2015 in Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, August 28, 2015

How Trusts Can Be Used To Influence Heirs

Trust moneyClients who plan to leave an inheritance to a loved one may want to have some control over how the heir spends his or her inheritance.  This article provides an example of a woman who does not like her son’s political views and would like to prevent him from using his inheritance to support the causes that she disagrees with.  One common way clients can maintain control over an inheritance after they die is by creating a trust.  For example, an incentive trust can distribute assets to beneficiaries so long as they meet some type of condition. 

Any requirements made by a trust would have to be legal or acceptable for public policy purposes.  A trust that seeks to prohibit donations to certain political causes might run into trouble on freedom of expression grounds.  This article discusses some of the ways around that like listing acceptable expenses and having the trustee enforce that. 

See Kerri Anne Renzulli, How to Control How Heirs Spend Your Money, Time, August 27, 2015.

August 28, 2015 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Article On Grantor Retained Annuity Trusts

Article PictureSteven Arsenault (Professor, Charlotte School of Law) recently published an article entitled, Grantor retained annuity trusts: after $100 billion, it's time to solve the great GRAT caper,63 Drake L. Rev. 373-399 (2015). Provided below is an excerpt from the article:

The Author proposes that the Treasury Department adopt an administrative exception under which the traditional valuation rules using the statutory assumed rate of return would not apply if, taking into account all facts and circumstances known to the grantor at the time of the creation of the trust, there is at least a 50 percent probability that, over the 36-month period following the transfer to the trust, the real rate of return on the assets transferred to the trust would exceed the assumed rate of return by 200 percent or more. This exception draws by analogy on an existing administrative mortality exception providing that the traditional valuation rules do not apply where the individual who is the measuring life for valuation purposes dies or is terminally ill at the time the gift is completed. The Author’s proposal does not seek to remove the traditional valuation method entirely. Rather, it is aimed at those situations in which the disparity between the statutory assumed rate of return and the real expected rate of return is so great that the use of the assumed rate is likely to be viewed as abusive.

August 28, 2015 in Articles, Trusts | Permalink | Comments (0)

Is The Trustee Or Director On The Hook For A Directed Trust?

Trust AltIn a traditional trust, the trustee is the ultimate authority and will be held accountable for any misconduct or other fiduciary violations. However, when a director has been appointed to the trust then the ultimate responsibility is harder to determine. The Uniform Trust Code, for example, absolves the trustee of any liability unless the director's order is clearly out of line with the trust terms or seriously breaches a fiduciary duty. In addition, the director, as long as they are not a beneficiary, is presumed to be a co-fiduciary and will be liable for any breach. Ultimately, one must look to an individual state's law to determine what the duties and liabilities of a director might be. Each state has a unique take on a director's liability compared to that of a trustee and will control the issue in the event of conflict.

SeeCharles A. Redd, Tips From the Pros: Directed Trusts—Who’s Responsible?, Wealth Management, August 27, 2015.

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


August 28, 2015 in Estate Administration, Trusts | Permalink | Comments (0)

Thursday, August 27, 2015

Estate Planners Should Avoid Making Titling Mistakes

Estate planOne very common way estate planners can mess up an estate plan is by incorrectly titling assets.  There is sometimes confusion about whether an account should be titled as a joint tenancy with right of survivorship (JTWROS), or be classified as a mere “convenience account” giving a person access to the funds in the account.  Difficulties can also arise when an estate planner is creating a JTWROS for an elderly client.  Families should be encouraged to utilize a power of attorney when making an estate plan for a client.  This article discusses some of the benefits and risks associated with these different estate planning options.

See Donald Jay Korn, Titling Mistakes Can Disrupt Estate Plans, Financial Planning, August 27, 2015.

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

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

Rampant Greed Leads To Devastating Consequences For Family

Piggy BankThe Baker family was prosperous, they possessed a valuable stake in several gyms, owned multiple properties, and seemed to be living the perfect life. However, greed got the better of them and saw the family using a series of illegal trust to avoid taxes with millions invested in a get rich quick ponzi scheme. As a result, they were faced with a vengeful IRS going after a diminished fortune to which they responded by doubling down and going with a sham divorce to hide what assets they had left. In the end, they were exposed in court for fraudulent transfers and will lose what ever wealth they have left.

This story is an excellent example that many people will go to any lengths to avoid paying what is owed and will often windup in a worse situation. When faced with a client that is plainly willing to do anything to avoid taxes and creditors, approach them with caution and make sure they know the limits of what is allowable. The rapacious must have boundries or else they will use those around to accomplish their illegal aims no matter the potential harm it could cause to those involved.

See Jay Adkisson, Son of BOSS Leads To A Divorce And Fraudulent Transfer Troubles In Baker, Forbes, August 22, 2015.

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

August 27, 2015 in Current Affairs, Current Events, Trusts | Permalink | Comments (0)

Historical Society Denied Standing To Bring Suit Over Historic Island Charitable Trust

Article PictureGardiner’s Island is something of a throwback to a time past due to the preservation of the island's historical character by generations of the Gardiner family. However, a trust set up by a family member to ensure the island remained pristine is now embroiled in controversy after accusation of mismanagement by the local historical society. The society claimed the trustees were misusing the assets and sought a court order forcing the trust to return to it's purpose of historical preservation. But a New York appellate court has denied the society standing stating the group was not a named beneficiary and did not have a "special interest" to give them standing. As a result, only the Attorney General of New York may bring the suit against the trust to enforce its purpose and, as of now, has shown no inclination to take action.

See John T. Brooks & Jena L Levin, No Standing to Enforce a Charitable Trust, Wealth Management, August 25, 2015.

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

August 27, 2015 in Current Affairs, New Cases, Trusts | Permalink | Comments (0)