Wills, Trusts & Estates Prof Blog

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

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Wednesday, August 20, 2014

What Robin Williams’ Estate Plan Did Right

Robin_WilliamsRobin Williams’ did not have a simple family situation, and his three marriages and children from two of them could not have made his estate planning process easy. However, Williams' seemed to have made the best of his complicated situation. While his life and accomplishments are headline news after his death, his estate planning decisions are not. At least not as much as those of other high profile celebrities', such as Philip Seymour Hoffman, and not as detailed. By relying on trusts instead of a will, Williams has ensured privacy for his family and immediate support for his children since they will not have to navigate the probate process.

See Stephen Lacey, Celebrity Tragedies Shine a Bright Light on Estate Planning, Florida Today, Aug. 18, 2014.

August 20, 2014 in Current Affairs, Estate Planning - Generally, Film, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, August 18, 2014

Millionaire Next Door Leaves Fortune to Charity

United way

When Phyllis A. Stone died on January 8, 2013, few realized that she possessed an investment portfolio that included tens of thousands of shares of stocks and bonds.  Ms. Stone, who never married and had no immediate family, left an estate worth more than $6 million that she bequeathed to charity.  In her will, Ms. Stone gave six-figure bequests to the Children’s Hospital at Albany Medical Center, Salvation Army, American Red Cross, and the United Way of the Greater Capital Region.  The institutions were taken aback when informed of their inheritance.  “Sometimes we don’t even realize the ways we touch people’s lives.” 

See Paul Grondahl, Modest Woman Turned Out to Be the Millionaire Next Door, Timesunion, Aug. 15, 2014. 

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

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

Sunday, August 17, 2014

Planning for Special Assets

Signing

Oftentimes there are particular assets in one’s estate that may necessitate special consideration due to their nature, value, or significance.  Provided below are just a few examples of these special assets, and how they might be handled.

  • Businesses.  Because some businesses require a license or special expertise, they will require a special trustee or administrator be appointed to administer the asset. 
  • Firearms.  A gun collection can be held in a special gun trust managed by a trustee who has a firearm’s license.  The trustee can allow for the guns to be shared amongst various beneficiaries and for the guns to be stored and managed by designated individuals. 
  • Pets.   Pets depend on their owners, as they will need care during their owner’s disability and possibly a new home after their owner dies.  A pet owner’s trust can provide instructions to use the owner’s resources to pay for vet visits, boarding, etc.
  • Jewelry.  Sentimental or valuable jewelry needs to be itemized and kept in a secure location.  If jewelry is not given away during the owner’s lifetime then someone should be appointed to be in charge of it upon the owner’s death. 

See Dennis Fordham, Estate Planning: Planning for Special Assets, Lake County News, Aug. 15, 2014.

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

New Case: Estate of Maher v. Iglikova

Gavel2A nonmarital child born before the execution of father’s will and legitimated thereafter is not a pretermitted child.  The Florida intermediate appellate court in Estate of Maher v. Iglikova, 138 So. 3d 484 (Fla. Dist. Ct. App. 2014), reversed a summary judgment holding that decedent’s nonmarital child was a pretermitted child.  The court found that the child, born before execution of the will, participated in a class gift to “children” in the will and that the child’s legitimation after execution of the will is not equivalent to being adopted after will execution.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

August 17, 2014 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, August 15, 2014

Six Ways to Avoid Accidental Inheritance by Minors

FamilyThe problem of minors being designated as the recipient of inherited property can happen by accident. While a court can fix this type of accidental inheritance problem through a guardian or by delaying the property distribution, this problem can be avoided by using estate planning tools to prevent an accidental inheritance of property by a minor. Here are six ways to avoid this type of problem:

  1. Include in the will that the executor can distribute the property left to minor to a custodian instead.
  2. Give the executor the ability to use the funds left to the minor for the benefit of the minor.
  3. Create a contingent trust that is effective only if a minor is left property.
  4. Don’t name current minors as beneficiaries for any accounts.
  5. Remember to name a successor owner and contingent successor owner, if allowed, for all college savings accounts.
  6. Create intervivos trusts with minors as the beneficiaries.

See Sandra W. Reed, Estate Planning and Minors, YourGlennRoseTX, Aug. 7, 2014.

August 15, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Thursday, August 14, 2014

Assessing Robin Williams' Estate Plan

Robin williams

Millions of Americans are mourning the sudden death of Robin Williams—a world-class comedic genius who made millions in order to care for his children.  Despite his efforts, Williams’ estate planning abilities may not have matched his gift to entertain.

Experts say that it is possible Williams may not have left a will, although this may not have been a bad thing.  “It’s very likely he used a revocable trust.  A lot of our California clients take that approach,” explained Daniel Rubin, a partner at Moses & Singer.  Because probate tends to be a lengthy process in California, wealthy people often opt to create a revocable living trust instead of a will.  They make themselves the trustee, and in the trust documents indicate how they want to allocate their assets.  Upon their death, the assets are distributed without public review. 

Williams did leave money in a trust for his three children, yet the trusts could have been structured more effectively.  Reports indicated the trust assets were to be distributed to Williams’ children in three increments: at age 21, 25, and 30.  However, those may not be the best times for children to receive large sums of money.  The more modern way of structuring a trust is to give children responsibility for appointing the trustee at a certain age.

See Kelley Holland, Robin Williams’ Estate Plan: Good, But Not Great, CNBC, Aug. 12, 2014.

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

August 14, 2014 in Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

New Case: Estate of Hedrick v. Lamach

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The Supreme Court of Montana recently held that a joint will did not prohibit transfer to trust by surviving spouse.  Spouses executed a joint will dividing the residue of the estate on the death of the second to die among their children by prior marriages and waiving the right to alter, amend, or revoke the will after the death of the first spouse to die. The surviving spouse transferred much of her property to a lifetime trust, and upon her death objections were filed to the proposed distribution under the joint will on the grounds that the will prohibited the surviving spouse from transferring assets to a trust, in which the provisions are not the same as those of the will. The Supreme Court of Montana reversed the trial court’s grant of summary judgment to the objectant, holding that the words of the will did not prohibit a transfer by the surviving spouse into trust. The court remanded for consideration of the objectant’s contention that the terms of the trust did not take control of the property out of the hands of the surviving spouse.  Estate of Hedrick v. Lamach, 324 P.3d 1202 (2014).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

August 14, 2014 in Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 13, 2014

Article Review: Teaching Trusts and Estates

TeachingPhyllis C. Taite has written a review on Robert H. Sitkoff’s recent article entitled, Trusts and Estates: Implementing Freedom of Disposition, 58 St. Louis U.L.J. 643 (Forthcoming, 2014).  Provided below is an introduction to the review:

Professor Robert Sitkoff’s article, Trusts and Estates: Implementing Freedom of Disposition, provides practical information and addresses major themes for professors teaching trusts and estates including intestacy, wills, trusts and planning for incapacity. It is a wonderful primer for professors and students new to the area of estates and trusts. For the more seasoned professors, Professor Sitkoff provides policy questions that will certainly provide an opportunity for healthy debates amongst the students. There are only a handful of articles that explicitly address trusts and estates pedagogy; this article does not simply summarize the curriculum, but rather it encourages law faculty to think in a big picture way about the overarching issues. As such, it is an important contribution to the scholarly literature.

For the rest of the favorable review, see Phyllis C. Tate, Teaching Trusts and Estates, JOTWELL, Aug. 8, 2014.  

Special thanks to Paul L. Caron (Pepperdine University School of Law) for bringing this article to my attention.

August 13, 2014 in Articles, Estate Planning - Generally, Teaching, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

New Case: In re Estate of Thompson

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A revocable trust was created in fraud of the surviving spouse’s rights included in calculation of elective share.  A year before his death, the husband executed a revocable trust, which on his death gave his wife a cash gift of $100,000.  Previous wills and trusts had been much more generous to wife.  The final trust was executed after the spouses separated. After the husband’s death, his wife filed with the court to take her elective share and sought to include the property in the trust in the husband’s estate solely for purposes of calculating the elective share. The trial court found in the wife’s favor and on appeal by the trustee, a divided Arkansas Supreme Court affirmed, finding that the evidence supported the lower court’s finding that the trust was created to deprive the wife of her marital property rights, that the trust property should therefore be included in calculating the elective share, and that the trust was valid in all other respectsIn re Estate of Thompson, 2014 Ark. 237 (2014).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

August 13, 2014 in Estate Administration, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 12, 2014

Why Wealthy Parents Decline to Leave Their Fortune to Their Kids

Sting

Sting recently publicized that most of his $300 million fortune will not end up with his six adult children, “I certainly don’t want to leave them trust funds that are albatrosses round their next.”  Indeed, Sting is not the exception.  Bill Gates, Warren Buffet, and Philip Seymour Hoffman all have large fortunes, and none of them are giving it to their kids. 

The reason celebrities and other wealthy families may decline to leave large sums of money to their children could be the negative rap on “trustafarians,” which are spoiled rich children with more money than sense.  It is possible that children who have unfettered access to a large inheritance will not make smart choices or live healthy, productive lives.  Celebrity chef Nigella Lawson stated she intends to leave no substantial inheritance for her children, “I am determined that my children should have no financial security.  It ruins people not having to earn money.”

While wealthy families have always struggled with this issue, it is now playing out on a smaller scale for millions of baby boomers, who plan to give away $30 trillion over the next 30 years.  Yet boomers are unlike other generations—they are more likely to give away money while living, and they are more concerned about their adult children finding and keeping jobs.  Excess assets will go into tax-protected trusts that can be liberal or restrictive.

See Roxanne Roberts, Why the Super-Rich Aren’t Leaving Much of Their Fortune to Their Kids, The Washington Post, Aug. 10, 2014.  

Special thanks to Richard E. Mattersdorff (a Texas lawyer) for bringing this article to my attention.

August 12, 2014 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)