Saturday, March 18, 2017
Richard and Jonathan Powell, two brothers, were recently slammed by a judge after blowing their entire inheritance in a hopeless bid to stop their stepmother from getting an extra $30,000 from their father’s will. Initially, the brothers claimed that their disabled father did not have the proper capacity when making his final will and granting his second wife $155,000. Further, they argued that an earlier will was his final and true will, which would have awarded their stepmother $125,000. At the final ruling, the judge blasted the brothers as unreasonable and forced them to pick up the final $250,000 legal bill, which wiped out their own inheritances of $75,000 each. The judge was appalled that the Powell brothers would fight such a frivolous claim driven by personal issues.
See Richard Spillett, Farmer’s Sons Lose Their ENTIRE £200,000 Inheritance from Father’s Will in Doomed Legal Bid to Stop Their Stepmother Getting an Extra £25,000, Daily Mail, March 17, 2017.
Special thanks to Jin Xu Spinhirne for bringing this article to my attention.
Friday, March 17, 2017
David Horton & Reid K. Weisbord recently published an Article entitled, Boilerplate and Default Rules in Wills Law: An Empirical Analysis, 102 Iowa L. Rev. (Forthcoming 2017). Provided below is an abstract of the Article:
The prime directive of wills law is to honor a testator’s intent. As a result, lawmakers take pains to populate the field with majoritarian default rules: those that fill gaps in an estate plan with principles that reflect the wishes of most property owners. However, this Article exposes a phenomenon that undermines these efforts. Using an original, hand-collected dataset of 230 recently-probated wills, it demonstrates that testators routinely opt out of majoritarian default rules through provisions that appear to be boilerplate. This practice is especially prevalent for “non-salient” matters: vital but obscure topics such as the consequences of a beneficiary dying before the testator, how to divide gifts among multi-generational classes, and who must pay mortgages and death taxes. The Article then uses these empirical results to urge judges and legislatures to reconsider the structure of default rules in wills law. Currently, most non-salient topics are governed by “simple” default rules, which yield to any contrary textual command. Conversely, the Article argues that “sticky” defaults, which are harder to displace, would better-insulate a testator’s likely desires from the plague of testamentary boilerplate.
Thursday, March 16, 2017
Adam J. Hirsch recently published an Article entitled, Testation and the Mind, 74 Wash. & Lee L. Rev. (2017). Provided below is an abstract of the Article:
This Article explores the panoply of state-of-mind rules in inheritance law. In areas of law concerned with wrongdoing, consideration of mental states achieves specific deterrence and moral justice. By comparison, in the inheritance realm, I argue that consideration of mental states can serve to economize on decision costs. The Article looks at state-of-mind rules through this prism and also analyzes the public policy of these rules from the perspective of modern research into psychology. Finally, the Article examines state-of-mind rules comparatively, identifying inconsistencies between them that require justification. The Article closes by observing potential expansions of the model and applications in other areas of law.
Wednesday, March 15, 2017
Only 21% of those who plan to leave inheritances to their children actually tell them how much money they will receive. Additionally, when the children do find out the size of their inheritance, it is often less than they expected. These unrealistic expectations can lead to high emotions and family tension. Grief mixed with family conflict can create even more turmoil upon finding out the terms of a loved one’s will. One way to minimize these conflicts is by creating an “ethical” will, which is a document explaining to your children why you divided up the assets in the way that you did. It can also be helpful to talk with your children while your still alive and give them an estimation of their future inheritance.
See Suzanne Woolley, Hoping for an Inheritance? You May Not Get as Much as You Expect, Financial Advisor, March 15, 2017.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Tuesday, March 14, 2017
Iris J. Goodwin recently published an Article entitled, Access to Justice: What to Do About the Law of Wills, 2016 Wis. L. Rev. 947. Provided below is an abstract of the Article:
Part I of this Article places the online, do-it-yourself will in the context of the push to enlarge access to justice for people of poor or moderate means in civil law matters. Part I has three subsections. The first of these subsections examines the recent movement to expand pro se representation where sundry civil law rights are concerned. The second subsection explores the significance of pro se opportunities in non-litigious circumstances such as estate planning. The third subsection considers what might be at stake for the poor and middle class in the right to dispose of property at death. Part II treats the online, do-it-yourself will and its tenuous position in the current law of wills. Part III makes the case that the online, do-it-yourself will is not so clearly an attested will but is a hybrid, with attributes of a holographic instrument also. This insight sets the stage for the later argument that an exception in the law with respect to the rigorous treatment of legal language--a kind of interpretive generosity--previously extended to the holographic will is appropriately applied to this newer vehicle created via self-help. Part IV sets out the rigorous standards for execution that any will--lay-drawn or otherwise--must surmount. This Part examines both the historic requirements for execution (many of which are still in play in some states) and recent reforms, building to the observation that the attested will and the holographic one, even though each is predicated upon a distinct legal ethos, are starting to merge. This observation invites use of standards heretofore applicable to the holographic will (standards like interpretive generosity) to the attested (or hybrid). Part V leaves behind the rigors for executing a will and turns to the other legal challenge for the person who would create a will without assistance of counsel--the canons of construction for testamentary language. If the rigors of execution have begun to ameliorate, the standards for interpreting legal language are still robust. Part VI examines interpretive largess as it has been applied to holographic wills and suggests that it be extended to the online, do-it-yourself will. Part VII acknowledges the potential that an expanded use of interpretive largess could have on the law of future interests and suggests ways to cabin it by embedding its application in a rigorous methodology and then limiting its application.
Les Raatz recently published an Article entitled, State Constitution Perpetuities Provisions: Derivation, Meaning, and Application, 48 Ariz. St. L.J. 803 (2016). Provided below is an abstract of the Article:
The Rule Against Perpetuities, over the last decade or so, has attracted greater attention within areas of the estate planning bar. There are interrelated factors that are the primary reasons for this attention. One is the marketing of trusts that are designed to better protect against the ability of creditors of the beneficiaries of a trust to reach assets of the trust to satisfy their claims. Lengthening the period that such assets may remain unvested in beneficiaries in the trusts is touted as enhancing their value and usefulness. The longer period to defer vesting also has beneficial estate tax consequences. If trust property can be held for generations in a trust not subject to the common-law rule requiring the vesting of interests of the trust in the beneficiaries of the trust within a period ending twenty-one years after the death of the last to survive of those living when the trust became irrevocable, then inclusion of trust assets in the gross estates of beneficiaries for federal estate tax purposes is avoided to a greater extent.
Another less considered estate and income tax consequence is the ability to cause inclusion of trust property in the gross estate of a decedent by means of the decedent springing the Delaware Tax Trap (“DTT”) in order to cause the basis of the property to be “stepped up” to its fair market value at the date of the decedent's death when no estate tax would arise. The DTT occurs when a person holding a power of appointment over property in trust appoints the property in further trust effective upon the person's death and grants another a power to thereafter appoint the property, which second power may be exercised to postpone vesting over a perpetuities period determined from a different date than the date of the perpetuities period applicable to the first power. The intentional triggering of the DTT is a new planning device that arose from the substantial increase in the federal estate tax exemption. If the beginning date applicable to the perpetuities period in which the property must vest pursuant to exercise of the second power would otherwise violate the common-law rule, then state legislation must permit the variance.
However, legislation alone might not assure the abrogation of the common-law Rule Against Perpetuities. Some states' constitutions contain clauses that at least raise the issue of whether such legislation may be prohibited. This Article discusses the proper interpretation of many of those constitutional provisions. The proper interpretation is dependent upon examination of the history of the early development of the constitutional provisions. This author concludes that the meaning of the states' constitutional prohibitions against perpetuities was not to address remoteness in vesting, but to address the historic meaning of “perpetuities,” that of restraints against alienation of title.
Monday, March 13, 2017
For those who die without a will, the distribution of their estate can get ugly, which may very well be the case for the 50% of American adults who do not have a will. Further, there are those people who never reach an obvious point in their life when writing a will seems essential—unmarried, no children, no illness, and no brush with death. But what happens when you hit a milestone birthday, your relationship becomes more serious, or your niece starts talking about attending an expensive art college? Creating your estate plan will be essential even if all you care about is not putting your assets into the hands of politically connected lawyers, judges, and contractors.
See Allen Salkin, Single? No Children? No Will? Big Mistake, N.Y. Times, March 10, 2017.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Tuesday, March 7, 2017
J. William Gray, Jr. & Katherine E. Ramsey recently published an Article entitled, Wills, Trusts, and Estates, 51 U. Rich. L. Rev. 125 (2016). Provided below is an abstract of the Article:
The 2016 General Assembly of Virginia made substantial changes in the augmented estate rights of surviving spouses. It also modified and codified the rules governing powers of appointment. Other legislation affecting wills, trusts, and estates included clarifications and technical corrections relating to such subjects as creditors' claims to life insurance and annuities, court-created trusts, protection of adults from exploitation, creditor protection for residential property, unclaimed assets, guardianships, and nonstock corporation procedure. Five decisions of the Supreme Court of Virginia addressed fiduciary conflicts, tenancies by the entirety, lost wills, contract rights in residences, and no-contest clauses.
Sunday, March 5, 2017
In England, the government has ignored strong opposition and, by May 2017, will implement a sliding scale system for probate fees based on the value of an estate, which will ultimately see dramatic increases. On the high end, estates worth over $2 million will be forced to pay close to $25,000 just to execute a loved one’s will. This is a sharp contrast to the current price of just $250. This fee will also be charged on top of the already-maintained inheritance tax, which is levied at 40pc on an individual’s assets above $400,000. Of course, these changes will add further complexity to estate planning, but certain planning techniques, such as trusts, may help reduce the value of an estate.
See Sam Brodbeck, New Death Tax Confirmed: Probate Fees of Up to £20,000 Will Apply from May, Telegraph, March 1, 2017.
Special thanks to Jim Manel (Texas Tech University School of Law J.D. Candidate) for bringing this article to my attention.
Thursday, March 2, 2017
Kurt X. Metzmeier recently published an Article entitled, Constructing Freedom: A Letter by George M. Bibb Concerning the Will of the Rev. Richard Bibb, Sr., 9 Unbound: A Review of Legal History & Rare Books 133 (2016). Provided below is an abstract of the Article:
Slavery, America’s original sin, played a pervasive role in the psyche of Kentuckians before the Civil War. No group faced more moral anguish than the state’s Christian ministers, many who also owned slaves. In the late 1830s, a Methodist minister, Richard Bibb, began to grapple with these issues. Having early settled earlier in Western Kentucky in one of the areas of the state most amenable to plantation agriculture, Bibb had owned up to a hundred slaves at times. But now he was called by his faith to free them, something he did most finally in his will, probated after his death in 1839.
His son, John B. Bibb, was named as executor but Kentucky law made the freeing of large groups of very difficult so John asked his brother, a prominent Kentucky jurist and Democratic politician for legal advice. George M. Bibb had just finished a term as a proslavery U.S. senator and was now judge of the Jefferson County Court of chancery.
Judge Bibb responded with a well-reasoned opinion letter that applied the law of wills to Kentucky's restrictive emancipation laws, laws that attempted to prevent free slaves from remaining in the state and becoming a charge on the county poor law rolls. Bibb acknowledged his opposition to his father’s pro-emancipation views but assured his brother John that his ethical duty to help advance the intentions of the testator overrode any feeling along those lines. The letter is an extraordinary example of an antebellum legal opinion letter.
The will is transcribed faithfully but footnotes are added to provide proper citations for all the authorities cited. Detailed introductory chapters describe the Bibb family, discuss the views of Rev. James Bibb, Sr., set out the law of slavery and emancipation in Kentucky, and give a thumbnail sketch of one of the freed men Andrew J. Bibb.