Wills, Trusts & Estates Prof Blog

2 New Blogs Join Law Professor Blogs Network

We are pleased to announce the launch of two new blogs as part of our Law Professor Blogs Network:

• Business Law Prof Blog (Dale Oesterle (Ohio State))
• Elder Law Prof (Anne Kimberly Dayton (William Mitchell))

These blogs join our existing blogs:

• AntitrustProf Blog (Shubha Ghosh (SUNY Buffalo))
• ContractsProf Blog (Carol Chomsky (Minnesota) & Frank Snyder (Texas-Wesleyan))
• CrimProf Blog (Jack Chin (Arizona) & Mark Godsey (Cincinnati))
• Health Law Prof Blog (Betsy Malloy (Cincinnati) & Tom Mayo (SMU))
• LaborProf Blog (Rafael Gely (Cincinnati))
• Law Librarian Blog (Joe Hodnicki (Cincinnati))
• Law School Academic Support Blog (Dennis Tonsing (Roger WIlliams) & Ellen Swain (Vermont))
• Media Law Prof Blog (Cristina Corcos (LSU))
• Sentencing Law & Policy Blog (Douglas Berman (Ohio State))
• TaxProf Blog (Paul Caron (Cincinnati))
• Tech Law Prof Blog (Jonathan Ezor (Touro) & Michelle Zakarin (Touro))
• White Collar Crime Prof Blog (Peter Henning (Wayne State) & Ellen Podgor (Georgia State))
• Wills, Trusts & Estates Prof Blog (Gerry Beyer (Texas Tech))

LexisNexis is supporting our effort to expand the network into other areas of law.  Please email us if you would be interested in finding out more about starting a blog as part of our network.

Fixing Defective Wills

In her comment, Equitable Remedies for Nonconforming Wills: New Choices for Probate Courts in the United States, 79. Tul. L. Rev. 723 (2005), Leigh Shipp outlines the current remedies for defective wills and recommends that courts be allowed to use their discretion on a case-by-case basis to determine whether the testator intended the document to be his or her will.

Family Limited Partnerships

The use of family limited partnerships as an indiscriminate panacea in estate planning was brought to a halt by the Strangi and Stone cases. In the wake of these far-reaching decisions, Bradford Updike, an advisor to Securities America, Inc. (SAI), offers an organized explanation of important legal developments in FLP law in his article Making Sense of Family Limited Partnership Law after Strangi and Stone: A Better Approach to Planning and Litigation through the Bona Fide Transaction Exception, 50 S.D. L. Rev. 1 (2005).

Charitable Gifts

Alex E. Nakos, a shareholder in the Dallas, Texas firm of Malouf Lynch Jackson & Swinson, has recently published the second part of his comprehensive discussion of Maximizing Benefits from Gifts of Interests in (or Income from) Business Entities, Part 2, Prob. & Prop., May/June 2005, at 47.

Here is Mr. Nako's conclusion:

Most donors are concerned not only with the net cost to the donor of making a charitable contribution but also with the net benefit that the charity will receive from the contribution.  Thus, a donor contemplating a gift of an interest in a flow-through entity to a charitable organization must carefully plan the contribution so as to (1) maximize the donor's charitable contribution deduction, (2) minimize any gain recognized by the donor as a result of the contribution, (3) minimize the amount of UBIT the charity will receive between the date of the gift and the date the charity disposes of the property, and (4) minimize the effective tax rate applicable to any UBIT the charity will receive.  Usually, this will require much collaboration among the donor, the charity, and their respective accountants and attorneys.

Kind Mention of Blog

Eva M. Lang, a writer for the The American Institute of Certified Public Accountants, included a kind mention of this blog in her article, Would You, Could You, Should You Blog?

Here is the relevant except from Ms. Lang's article:

A few blogs are springing up in niche areas. Chicago attorney Joel A. Schoenmeyer publishes the Death and Taxes blog (http://jas-law.typepad.com) and Gerry W. Beyer, a professor at St. Mary’s University School of Law, maintains the Wills, Trusts & Estates Prof Blog (http://lawprofessors.typepad.com/trusts_estates_prof). Those pretty much corner the market on estate planning blogs.

I commend her excellent article to anyone interested in blogging -- it is very well-researched and enjoyable to read.

Congratulations to Adam Hirsch

The following is from a press release issued by the Florida State University School of Law:

ADAM HIRSCH NAMED THE WILLIAM AND CATHERINE VANDERCREEK
PROFESSOR AT THE COLLEGE OF LAW

TALLAHASSEE—Adam Hirsch, a leading authority on wills and trusts, has
been named the William and Catherine VanDercreek Professor of Law at The Florida State University College of Law.

The professorship is a collaborative effort of the VanDercreeks along with friends
and former students of Bill VanDercreek. It was created to allow the law school to recruit or retain an exceptionally productive legal scholar.

Professor Hirsch teaches Bankruptcy Policy Seminar, Creditor's Rights, Estate
Planning, Gratuitous Transfers, and American Legal History. He has served as the Roger Traynor Fellow at Hastings College of Law, and he is an Academic Fellow of the American College of Trust and Estate Counsel.

“Bill VanDercreek has been a friend and mentor since the day I arrived at the College of Law,” Professor Hirsch said. “I am honored to accept this professorship.”

Professor Hirsch received his law degree in 1982 and a Ph.D. in history in 1987 from Yale University, where his doctoral dissertation received the George Washington Egleston Prize for the best dissertation in American history. He expanded this work into a book, The Rise of the Penitentiary: Prisons & Punishment in Early America (Yale University Press, 1992).

Over the past two years, Professor Hirsch worked as a consultant to the subcommittee of the Real Property Probate and Trust Section of The Florida Bar that drafted a comprehensive revision to Florida’s statute covering disclaimers of inheritances. The Florida Legislature recently enacted the statute, and it awaits the governor’s signature.

Most of Professor Hirsch’s scholarship over the past 15 years has focused on wills, trusts and estates, and jurisprudence.

Bill VanDercreek taught civil procedure and complex litigation courses at the College of Law from 1968 until his retirement in 1993. He was the Moot Court advisor for twenty-five years and now is professor emeritus.

Congratulations, Adam!!!

Income Tax Reimbursement Trust Provisions

William S. Forsberg (shareholder in Parsinen Kaplan Rosberg & Gotlieb P.A.) and James C. Worthington (Counsel of Stites & Harbison PLLC) analyze Income Tax Reimbursement Clauses in Irrevocable Grantor Trusts -- When to Use Them and When Not To, Prob. & Prop., May/June 2005, at 36.

The authors' conclusion reads as follows:

Giving the trustee of an IGIT the discretionary power to reimburse the grantor for income taxes incurred by the IGIT can be a valuable tool.  It provides the grantor with flexibility in his financial and estate planning and may help to avoid the "exploding IGIT phenomenon."  Certainly, Rev. Rul. 2004-64 is helpful in providing guidance on how an income tax reimbursement provision should be drafted.  The Ru7ling, however, does raise other issues that could produce adverse tax and creditor problems.  Caution is the key word.  Check the client's creditworthiness and state spendthrift laws before blindly incorporating such a provision in the IGIT.  The effect of state spendthrift laws may be yet another reason to set up trusts in "asset protection" states such as Alaska or Delaware.

GRAT Remainders

Michael D. Whitty, a partner with the Chicago office of Winston & Strawn, LLP., discusses Repercussions of Walton: Estate Tax Inclusion of GRAT Remainders, Prob. & Prop., May/June 2005, at 13.

Here is Mr. Whitty's conclusion:

The IRS's aggressive position asserting total or near-total GRAT inclusion is demonstrably incorrect.  It deserves to be challenged and defeated in the courts soon, so that grantors and planners can implement Walton-type GRATs, knowing that GRAT inclusion will involve only the interest truly retained by the grantor, that is, the annuity payments.  Without any need for a reversion or revocable spousal interest, planners can design GRATs without such provisions and can otherwise plan to minimize the amount includible in the grantor's estate.

Traditional Trustee Loyalty Duties Questioned

John H. Langbein, Sterling Professor of Law and Legal History at Yale University, has recently published an extensive and well-reasoned article entitled Questioning the Trust Law Duty of Loyalty: Sole Interest or Best Interest?, 114 Yale L.J. 929 (2005).

Here is the summary of the article as provided by LexisNexis:

The duty of loyalty requires a trustee "to administer the trust solely in the interest of the beneficiary." ... The 1979 Act does not regulate the fiduciary duties of such agents, hence it remits fiduciary issues to the common law of agency, which applies a sole interest rule comparable to that of trust law. ... A court or a legislature could conclude that a higher-than-ordinary standard should be imposed on a reformed trust law duty of loyalty, and thus require the trustee to prove by clear and convincing evidence that the conflicted transaction was prudently undertaken in the best interest of the beneficiary. ... By contrast, the trustee who has violated the trust law sole interest rule in circumstances in which the purpose was to benefit the beneficiary will routinely be alive and able to testify about those circumstances. ... In a case such as Boardman v. Phipps or in the most embarrassing of the auction cases, the sole interest rule takes away a benefit from the trustee who earned it and awards it to the trust beneficiary.

Schadenfreude

Schadenfreude, the German term for taking pleasure in the misfortunes of others, is the focus of a well-researched and very entertaining article recently published by Prof. Drennan of the Southern Illinois University School of Law.

Below is a summary of the article as found on LexisNexis:

A commercial firm's advertisement to sell its product features a caricature or manipulated image of a deceased celebrity engaging in an offensive act. ... Nevertheless, often a celebrity (or her heir after death) can exploit the celebrity's name, likeness, or identity for commercial purposes in many harmless ways, particularly after the celebrity's death. ... If one balances the interests of (i) the eccentric celebrity who desires to absolutely destroy her right of publicity; (ii) the fans who enriched the celebrity and want to be reminded of her image and work; and (iii) the heirs of the estate who have a financial interest in reasonably managing the commercial use of the decedent's identity, the balance should tip in favor of the fans and the heirs. ... However, when the "no disgraceful use" restriction actually reduces the value of the celebrity's right of publicity, one might question whether persons entering into an arms'-length transaction would include a "no disgraceful use" restriction.

William A. Drennan, Wills, Trusts, Schadenfreude, and the Wild, Wacky Right of Publicity: Exploring the Enforceability of Dead-Hand Restrictions, 58 Ark. L. Rev. 43 (2005).