Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Tuesday, November 25, 2014

Goldsmith Estate Battle Heats Up

GlovesAs I have previously discussed, Deborah Karlstein has brought suit against her ex-husband's second wife, Debra Lee, in an estate battle over the death bed will revision that cut out her sons. Now, Karlstein is claiming that the international law firm that represents celebrity clients and her ex-husband Harry Goldsmith was a partner of, is threatening to sue her and cause her to rack up huge legal fees in retaliation for exposing the party boy ways of Goldsmith and the firm's inattention to his drug and alcohol addictions. The firm is providing pro-bono legal counsel for Lee. While the firm has not denied Karlstein's claim, they expressed disaproval of Karlstein tarnishing Goldsmith's reputation.

See Julia Marsh, Law Firm of My Coke-Addicted Ex Threatened Me, New York Post, Nov. 21, 2014.

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

November 25, 2014 in Current Affairs, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, November 24, 2014

Article on Wills Law

David horton

David Horton (University of California, Davis School of Law) recently published an article entitled, Wills Law on the Ground, UCLA Law Review, Vol. 62, 2015 Forthcoming. Provided below is the abstract from SSRN:

Traditional wills doctrine was notorious for its formalism. Courts insisted that testators strictly comply with the Wills Act and refused to consider extrinsic evidence to construe instruments. However, the 1990 Uniform Probate Code revisions and the Restatement (Third) of Property: Wills and Donative Transfers replaced these venerable bright-line rules with fact-sensitive standards in an effort to foster individualized justice. Although some judges, scholars, and lawmakers welcomed this seismic shift, others objected that inflexible principles provide clarity and deter litigation. But with little hard evidence about the operation of probate court, the frequency of disputes, and decedents’ preferences, these factions have battled to a stalemate. This Article casts fresh light on this debate by reporting the results of a study of every probate matter stemming from deaths during the course of a year in a major California county. This original dataset of 571 estates reveals how wills law plays out on the ground. The Article uses these insights to analyze the issues that divide the formalists and the functionalists, such as the requirement that wills be witnessed, holographic wills, the harmless error rule, ademption by extinction, and anti-lapse.

November 24, 2014 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Saturday, November 22, 2014

James Brown Estate In Limbo

James brown

A companion of music legend James Brown has requested an Aiken Court in South Carolina ban several of Brown’s children from participating in hearings that will determine if Brown had a spouse when he died in December 2006. 

According to filings in the Brown estate case, defining Brown’s marital status will affect the rights of his children as well as his education charity. 

Under Brown’s 2000 will, companion Tomirae Hynie inherited nothing, which left his music empire to the “I Feel Good” Trust for education needy children in South Carolina and Georgia.  In 2007 Hynie contested the will, claiming to be Brown’s wife and entitled to a spousal share of his estate.  After a settlement deal in 2009, Hynie was given one-quarter of the estate and the six children were given another quarter. 

The South Carolina Supreme Court overturned this settlement in 2013, calling the deal a “dismemberment” of Brown’s “noble” estate plan.  As a result of the ruling, Hynie has renewed her spousal claim, and her motion for summary judgment is scheduled next week. 

Although Hynie and Brown exchanged vows in a 2001 ceremony, Hynie was married to another man at the time.  She later obtained an annulment, but Brown refused to marry her.    

See Sue Summer, SC: James Brown Companion Moves To Ban DNA-Proven Children From Estate Hearings, Watchdog Wire, Nov. 14, 2014. 

November 22, 2014 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Billionaire Spanish Duchess Leaves £2.2 Billion Estate to Children

WillThe funeral of the Duchess of Alba was attended by thousands including dignitaries, and members of the public filled the streets to watch her funeral procession. The Spanish Billionaire and direct royal descendent of King James II of England, died at 88-years-old due to pneumonia. The Duchess left her £2.2 billion estate to her six children. Each child is expected to receive a palace of their own. Her third husband Alfonso Diez, who is 24 years younger than the Duchess, was not included in her will and signed an agreement prior to the wedding that he would not receive any of her fortune. The agreement is believed to have been used to resolve a family feud over disapproval of the marriage.

See Ted Thornhill & Emma Glanfield, Duchess of Alba, Who Died Aged 88, Leaves Nothing to Her 64-Year-Old Toyboy While Her Six Children Get the £3 Billion Fortune, Daily Mail, Nov. 21, 2014.

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

November 22, 2014 in Current Affairs, Current Events, Death Event Planning, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, November 21, 2014

Estate Planning Without Children

Couple doing paperwork

Married couples without children who may be nearing retirement or have already reached retirement have two main tasks: One is to decide what happens to your property after you die.  The other, perhaps trickier, task is to specify who will handle your medial and financial affairs if you become incapacitated. 

Without creating a will or trust, state law will dictate who inherits your assets.  Generally, your assets will go to your spouse if you have no children, then your spouse’s relatives after he or she dies.  “This leaves the family of the first spouse to die disinherited and out of luck.  The side that inherits depends on the random order of who dies last.” 

Thus, if you do not want to risk disinheriting your relatives, or if you rather leave something to friends or charity, it is best to have a plan.  The simplest approach is for you and your spouse to execute “sweetheart” wills, leaving everything to each other and outlining who gets what after you both die.  Another approach is to transfer your assets, during life or at death, to a joint revocable living trust, which would spell out how the assets are to be distributed.  This avoids probate, which can be expensive and time consuming. 

It is also important to sign general powers-of-attorney and health-care documents empowering someone to make financial and medical decisions on your behalf if you become incapacitated.  While parents oftentimes appoint adult children, “people without children struggle to find someone they trust.” 

Spouses can appoint each other, but it is recommended to have a “Plan B,” which involves naming another, younger, person to serve simultaneously or in succession. 

See Carolyn T. Geer, Estate Planning for Childless Couples, The Wall Street Journal, Nov. 8, 2014.

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

November 21, 2014 in Estate Administration, Estate Planning - Generally, Intestate Succession, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 19, 2014

Recent Changes That Create Need For Married Couples to Update Wills

MarriedThere have been recent changes to tax laws that create the need for married couples to review their wills, especially provisions intended for tax planning purposes. Here are three major changes that create a need for a reread:

  1. Estate Tax Exemption. In the past 10 years the exemption amount has risen from $600,000 to a little over $5 million this year, changing considerations for estate planning since what may have been a taxable estate when the will was last reviewed may no longer be.
  2. Portability. Now that a surviving spouse can inherit the unused portion of their deceased spouse's exemption, will provisions creating a bypass trust may no longer be needed.
  3. Income Tax. Increased income tax rates create a change in considerations for whether bypass trusts will be beneficial, especially with the addition of the portability option.

See Kirk R. Wilson, Estate Tax Provisions for Married Couples in Recent Wills, Trusts May be Obsolete--Part I, Your Houston News, Nov. 14, 2014.

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

November 19, 2014 in Estate Planning - Generally, Estate Tax, Income Tax, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 18, 2014

Balkan Women Face Fight for Inheritance

Berisha

During the Kosovo war, Serbian police killed Shyhrete Berisha’s husband and four children.  Not only did Berisha lose her family, but she also lost the home they shared, a house belonging to her father-in-law.  After the war, Berisha recalls her mother-in-law telling her, “What do you need the house for? Everyone’s been killed.  It’s our house now.”  Refusing to give her the keys, Berisha had nowhere to go.

Berisha’s story highlights a problem occurring across the Balkans—discrimination amongst women in inheritance cases.  In these patriarchal societies, property and assets traditionally pass to the male heirs of the family, excluding women in spite of their legal entitlement to inherit. 

Although some officials and activists are trying to change attitudes through publicity campaigns, they are confronted by resistance from traditionalists and slow, overloaded legal systems. 

According to Kosovo law, when someone dies, their assets are divided among family members with the spouse and children receiving priority.  If a will exists, it can only exclude family members for specific conditions, none being related to gender.  While campaigns to promote gender equality have been underway, old traditions die hard.  Many still believe that property should be passed down through the male line along with the family name. 

Though this system may be slow to change, Berisha received the help of international charities to take legal action in Kosovo and win back her home. 

See Jeta Abazi Gashi, Feature—Balkan Women Face Fight to Inherit Property, Thomson Reuters Foundation, Nov. 18, 2014. 

November 18, 2014 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Cornelius Gurlitt's Will May Be Invalid

Gurlitt

Prior to his death, the son of art collector Hildebrand Gurlitt willed his massive art collection to a Swiss museum.  The hundreds of paintings and drawings, including Nazi-looted art once belonging to Jewish collectors, would be relocated to a legally neutral country. 

Yet when the artwork was uncovered in Gurlitt’s Munich residence and his Salzburg house in fall 2013, questions arose that renewed the debate of how Nazi-looted art should be legally dealt with. 

The Gurlitt case was resolved until a German newspaper reported Monday that Cornelius Gurlitt’s will may not be legally binding.  According to the newspaper, a psychiatric examination indicates that Gurlitt was not mentally stable enough to complete a valid will.  The physician conducting the examination reports Gurlitt allegedly suffered from “paranoia,” which voids his “freedom to decide” while creating his will. 

The Swiss museum plans to announce next week whether it will accept the inheritance of Cornelius Gurlitt, who passed away on May 6.  If the museum takes the collection, it is likely the psychiatric report may be forgotten. 

See Stefan Dege, Gurlitt’s Mental Illness Invalidates His Will, Says Report, DW, Nov. 18, 2014. 

November 18, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Bypass Bitterness in Blended Families

Family

With many baby boomers on their second or third marriages, the already touchy matter of who will inherit what can become a colossal challenge.  In the U.S. today, two out of five first marriages end in divorce, and about half of divorced people marry at least one more time.  Among couples that have married twice, about 65 percent include children from prior marriages.  This can complicate the transfer of brokerage accounts, real estate, and personal assets.  Add in tensions over divorces and rifts between stepchildren, and the situation is ripe for legal battles.   

An easy way to avoid feuds and lawsuits between a surviving spouse and stepchildren is to share your estate plan before you pass away. “It helps to say, ‘This is the plan I want followed’ and face whatever conflicts arise then.”  Below are a few ways blended families can keep the peace when dividing wealth:

  • Fairness. Minimizing bitterness between your children and their stepparent is possible if you divide your estate so that your children and your spouse each get something when you die. 
  • Trusts. A thoughtfully crafted trust can increase the odds heirs will not be at each other’s throats.  For example, a QTIP trust directs all the annual income from your estate to your surviving spouse, but also lets you specify who, in the event of his or her death, gets the remaining funds. 
  • Keeping Current. If you have remarried, it is important to update beneficiaries on accounts.  It is typical for people to put off updating documents or mistakenly think a divorce agreement is all they need.

See Carol Hymowitz, Ways that Blended Families Can Avoid a Wealth of Bitterness, Bloomberg, Nov. 10, 2014. 

November 18, 2014 in Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, November 17, 2014

Preserving Estate Planning Documents

Last will and testament

One can oftentimes underestimate the importance of preserving original estate planning documents. 

A decedent’s original will is required to commence probate.  Without it, it may be nearly impossible to probate the decedent’s estate.  When the terms of a missing will can be established through a copy, then one may try to probate the lost will.  However, the deceased testator last held the original will, then the missing will is presumed to have been revoked. 

Because it is so important to keep original documents, using a bank safe deposit box is a good approach provided someone has a key to the box or is named as a co-owner or co-signatory. 

Normally, the trust and will are kept together.  The same principles apply to any original trustee affidavits and trustee resignation documents. 

The original power of attorney to manage property, financial, and legal affairs must be maintained.  While some recipients may accept a certified copy of the original, the original document is required to be presented to a notary public or a licensed attorney for copying and certification.  If the power of attorney provides that it is immediately effective when signed, the original document should also be kept in a safe deposit box against abuse until needed. 

The advance health care directive or durable power of attorney is different than other documents in that a photocopy is as good as the original.  This also true for bank and brokerage account statements. 

See Dennis A. Fordham, Estate Planning: Importance of Original Estate Planning Documents, Lake County News, Nov. 15, 2014. 

November 17, 2014 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)