Wills, Trusts & Estates Prof Blog

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

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Wednesday, August 27, 2014

A Look Into Inheritance Demographics


According to a 2010 Survey of Consumer Finances, the median inheritance for Americans is about $69,000.  Yet an eye opening study from Maury Gittleman and Edward N. Wolff examined the prosperity of households between 1989 – 2007, and found the most likely Americans to inherit were those who needed it the least.  On average, 38 percent of households earning $250,000 a year or more received an inheritance compared with only 17 percent of households with an income of $15,000 or less.  Furthermore, the study indicated that wealthier households are not more likely to inherit and they receive larger sums. 

Racial and ethnic differences were widespread as well.  Twenty-five percent of non-Hispanic whites said they had received an inheritance in 2007, but 10 percent of African-Americans and 6 percent of Hispanics said the same.  These gaps have stayed constant since 1989. 

While it may be true that inheritance and other transfers have a sizable effect on reducing the inequality of wealth, this is just one study.  There are other studies in the U.K. and Paris that have reached different conclusions.  Moreover, inheritors may not be receiving wealth in the form of cash.  Businesses and homes are also common inheritances not provided for in this study.

See Mona Chalabi, A Dear Mona Follow-Up: Who Inherits? FiveThirtyEight, Aug. 26, 2014. 

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

August 27, 2014 in Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Anna Nicole Smith's Twenty Year Battle Finally Ends

Anna nicole

After nearly twenty years of contentious debate in the courtroom, a federal judge recently ruled Anna Nicole Smith’s estate would not receive millions of dollars from the estate of E. Pierce Marshall, the son of Anna Nicole’s late husband, J. Howard Marshall II.

Judge Carter ruled that there was “just no evidence before the court that justifies awarding sanctions against Pierce Marshall’s estate.”  The judge further added it is time for this suit to no longer “drag its weary length before the court.”

After Howard Marshall II died in 1995, he left his $1.6 billion estate to his son and nothing to Smith.  According to NBC news, Smith asserted her husband vowed to leave her more than $300 million; yet, a Houston jury ruled that Marshall was mentally fit when he wrote the will.  Over the course of twenty years, local and federal courts have rejected Smith’s attempts to overturn Marshall’s will and trust in order to obtain money from his estate. 

See Mike Vulpo and Claudia Rosenbaum, Anna Nicole Smith’s Estate Denied Again: Judge Says Dannielynn Birkhead Won’t Receive $44 Million, E News, Aug. 20, 2014. 

August 27, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Will of Woman Murdered During Vacation in Bali Filed in Cook County

WillTwo weeks ago, the body of Sheila von Wiese-Mack from Chicago was found in Bali, and her daughter and daughter’s boyfriend may be charged with her murder. Last week, a will of Wiese-Mack, signed Aug. 1, 2006, was filed in a Cook County court. However, it is still unclear who will inherit from Wiese-Mack’s estate, as the will leaves her property to a trust without naming the beneficiary in the will.

See Jon Seidel, Will of Chicago Mother Slain in Bali Filed in Court, Chicago Sun-Times, Aug. 25, 2014.

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

August 27, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, August 25, 2014

New Hampshire Law Untangles Probate Process

Last will and testament

Everyday there is a new headline regarding wills, inheritances, and disinheritances that have gone badly.  Recently, the estate of late city resident Geraldine Webber is in dispute to the point that it involves the Portsmouth Police Commission.  During a recent hearing, the situation was described as “a disgusting mess.” 

A new state law in New Hampshire involving the active role of Portsmouth lawyer Sally Mulhem at Mulhem & Scott PLLC, is designed to prevent future messes of this type.  It allows a will to be probated, therefore legal and binding, before a person passes away.  “I saw an alarming increase in the number of probate and trust litigation cases.  It was just devastating families, and the attorneys’ fees were just consuming whatever estate was there.  I didn’t want to see this trend continue.  I wanted to do something to get this under control.” said Ms. Mulhem.

Five years ago, Ms. Mulhem began working with the New Hampshire Trust Council to address the situation regarding wills, estates and trusts, and how to address the legal ramifications of trust law.  Their efforts produced SB 289, with passage of the measure by the Senate and House.  The bill was signed into law on July 11, with a start date of July 1, 2014. 

With the new law, a person with what is likely to be a controversial will can opt to hold a hearing before a probate court judge to determine the validity of what they have done.  “It allows the person to have a definitive say while they’re still here.”

See Paul Briand, New Granite State Estate Law Designed to End Shenanigans, Seacoast Online, Aug. 25, 2014. 

August 25, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)

Lauren Bacall Provided for Beloved Pet in Her Will

1940s Lauren BacallFilm Star Lauren Bacall died at age 89, leaving $26.6 million to her three children, minus $10,000. The set aside funds are for the care of her dog Sophie. Though the distributions were made public since they were through her will, Bacall made clear in the document that she wants her diary and personal letters kept private.

See, Lauren Bacall’s Pooch to Inherit 10,000 Dollars From Her Fortune, The Times of India, Aug. 23, 2014.

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

August 25, 2014 in Estate Planning - Generally, Film, Wills | Permalink | Comments (0) | TrackBack (0)

Sunday, August 24, 2014

Handling Your Inheritance

Inherit and invest

Oftentimes a sense of guilt is associated with an inheritance after a loved one passes.  “Most people are not prepared for the emotions that come with an inheritance . . . It’s different than winning the lottery.  When you win the lottery, you’re excited.  With an inheritance, it’s bittersweet.” 

One of the biggest mistakes made when people inherit money is not thinking it through, “People who don’t have means often squander the money on things they have been dying to have all these years, and then it’s gone.”  This usually wastes a good opportunity as an inheritance can move a struggling worker from just getting by to financial security. “Instead of funding a splurge like a Porsche, that money can better be used to pay down the mortgage or kids’ college, creating long-term security.” 

There are a few things you should remember when an inheritance comes your way.  Firstly, do not make hasty decisions, slow down and do not invest right away.  It is smart to take a “cooling off period,” and put aside the money until you can think about your long-term goals.  It can often be helpful to consult a financial planner or attorney to minimize your tax burden and plan for the long term. 

See Julie Landry Laviolette, Inherit? Invest, Miami Herald, Aug. 22, 2014.

August 24, 2014 in Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0) | TrackBack (0)

Saturday, August 23, 2014

Man Found Guilty of Manslaughter Cannot Indirectly Inherit from Victim

JailA Brooklyn appeals court has extended the rule that blocks individuals from inheriting from a person if they are responsible for that person’s death. Brandon Palladino is currently serving a 25 year sentence for manslaughter after pleading guilty to strangling his mother-in-law, Dianne Edwards. Edwards left her entire estate to her daughter, Palladino’s wife. A year later, Edward’s daughter died leaving her inheritance from her mother to Palladino. The court found that indirect inheritance is also not available to the guilty party, and Palladino will not be inheriting the $250,000 when he finishes his prison term.

See Oren Yaniv, Killer Denied Bid to Inherit $250,000 from Estate of Mother-in-Law He Strangled, New York Daily News, Aug. 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.

August 23, 2014 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Thursday, August 21, 2014

Article on Letters Non-Testamentary

Deborah gordon

Deborah S. Gordon (Drexel University School of Law) recently published an article entitled, Letters Non-Testamentary, Kansas Law Review, Vol. 62, No. 3 (2014); Drexel University School of Law Research Paper No. 2014-A-03.  Provided below is the abstract from SSRN:

Letters written in anticipation of death, so-called “last letters,” appear frequently in American case law, especially when inheritance is at issue. One common appearance is when such letters are offered to serve as wills for decedents who leave no other written indication of testamentary intent. Even where a properly attested will exists, though, many courts have construed letters as codicils – addenda – to the more traditional instruments, though such letters sometimes contradict or substantially alter the original wills. Courts also use letters as tools for interpreting ambiguous documents and as mechanisms for determining whether a formal property arrangement, a trust or conveyance for example, exists in the first place. Finally, courts have admitted letters into evidence to assess claims that a testator lacked capacity or suffered other testamentary infirmities. In other words, there is no question that last letters have influenced inheritance law and its participants, but just how and why has been unexamined, especially where the letter writers concede that the informal communications are not intended to be binding dispositions of their property or, in other words, where the letters are deliberately “non-testamentary.” 

Sometimes called “letters of wishes,” these letters “non-testamentary” are written by individuals who know and accept the law’s purpose and effect: they choose to execute formal wills to leave property to their loved ones; they choose to sign trusts to interpose a fiduciary between their beneficiaries and their wealth. Yet the authors supplement the legal documents with a written genre that is less formal, less traditional, and ostensibly not legally binding. But such letters non-testamentary tend to reveal what lies beneath the writer’s “will” – both the document and the intention – itself. Because third parties – courts for example – are not a contemplated part of the exchange between writer and recipient, complications arise. 

While others have bemoaned the inconsistencies that such homemade letters produce, this Article takes the opposite position: it argues that letters non-testamentary highlight a productive tension between lawyer-created documents that are clear and tax-efficient but often devoid of feeling and the reality of death as a frightening event that involves messy emotions and relationships. This humble, intuitive, and accessible genre allows writers to connect to their readers and confront their own deaths in a way that the standard instruments often do not. Indeed, property owners turn to the genre to fill emotional, rhetorical, and sometimes even legal gaps. As such, letters non-testamentary help outside readers learn about deficiencies that the current system promotes, like the writers’ lack of confidence with their documents. Finally, homemade last letters are illuminating because they show how ordinary people reconcile the dichotomy between efficiency – getting property where it should go – and emotion that lies at the heart of planning for separation and death. Because a family has much to lose when a will is challenged and much to gain when the probate process is easy and uncontested, a writer who builds empathy in her survivors through a letter non-testamentary may accomplish far more than if she relied solely on her formal documents. 

Recognizing the potential for the contradictions and ambiguities that homemade and informal communications may engender, this Article nevertheless argues that letters non-testamentary play an important role in planning for death, which may be why they have persisted through time and are likely to continue, even as the genre shifts form in today’s digital age.

August 21, 2014 in Articles, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

California Judge Resolves Final Issue in Anna Nicole Smith Lawsuit

Anna Nicole SmithAn Orange County federal judge has put an end to two decades of litigation over the will of J. Howard Marshall. Marshall and Anna Nicole Smith were married for 14-months when Marshall died leaving his entire estate, valued at $1.6 billion, to his son, E. Pierce Marshall. The ensuing legal battle that made it to the Supreme Court of the United States twice, was centered around Smith’s challenge of Marshall’s will. Both Smith and Marshall’s son are deceased and their estates have been continuing the lawsuit since their deaths.

On Monday Judge David O. Carter resolved the final issue in the lawsuit by denying Smith’s estate their request for sanctions against Marshall’s son’s estate, and noted that it was time for the lawsuit to end after lasting 20 times longer than Marshall and Smith’s marriage.

See Associated Press, Anna Nicole Smith’s Estate Loses Bid for Millions, My San Antonio, Aug. 19, 2014.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

August 21, 2014 in Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 20, 2014

New Intestacy Law in England May Affect Foreign Investors

LawNew intestacy rules will go into effect in England and Wales October 1 of this year and may add additional incentive for U.S. investors with real estate properties in England or Wales to have a valid will in place. The new rules are part of the English Inheritance and Trustees’ Powers Act 2014. Under the new rules if an owner of real estate in England or Wales dies intestate the entire property will pass to a surviving spouse if there is one. If there are children as well as a spouse, then the rules do not change as much. However, the spouse will receive their share absolutely rather than as a life estate.  If these outcomes are not agreeable with an investor’s intentions, then the good news is that foreign wills will be recognized as long as they are valid and executed in the individual’s country of domicile or continuous residence, or where the individual is a national.

See Richard Norridge, Mark Johnson & Gareth Thomas, Changes to Inheritance and Intestacy Rules in England and Wales May Affect Overseas Property Investors, Herbert Smith Freehills, Aug. 12 2014.

August 20, 2014 in Estate Planning - Generally, Intestate Succession, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)