Wills, Trusts & Estates Prof Blog

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

Friday, August 26, 2005

Conservation Easements

Prof. Nancy A. McLaughlin of the University of Utah - S.J. Quinney College of Law has recently posted on SSRN her article entitled Rethinking the Perpetual Nature of Conservation Easements.

Here is the abstract of her most interesting article:

As the use of perpetual conservation easements as a land protection tool has grown, so have concerns regarding whether, when, and how such easements may be modified or terminated to respond to changed conditions. This Article argues that the charitable trust doctrine of cy pres should apply to donated conservation easements and, if interpreted as suggested, can provide a principled means of modifying or extinguishing easements that have ceased to provide public benefits sufficient to justify their continued enforcement (or have even arguably become detrimental to the public). The Article argues that a landowner should be viewed as striking the following "cy pres bargain" with the public upon the donation of an easement - the landowner should be permitted to exercise dead hand control over the use of the property encumbered by the easement, but only so long as the easement continues to provide benefits to the public sufficient to justify its enforcement. If, due to changed conditions, the continued protection of the encumbered land for the conservation purposes specified in the easement deed becomes "impossible or impracticable," a court should apply the doctrine of cy pres to restore the appropriate balance between the landowner's desire to exercise dead hand control, and society's interest in ensuring that charitable assets continue to provide benefits to the public. In cases where the donor evidenced a particularly strong personal attachment to the encumbered land and the continued protection of that land for a different conservation purpose is feasible, a court could apply the doctrine of cy pres to modify the easement to change its conservation purpose while continuing to protect the underlying land. Alternatively, in cases where the donor did not evidence a particularly strong personal attachment to the encumbered land, or where the continued protection of that land for a different conservation purpose is not feasible, a court could apply the doctrine of cy pres to extinguish the easement, authorize the sale of the unencumbered land, and direct that the proceeds attributable to the easement be used to accomplish the donor's specified conservation purposes in another location.

August 26, 2005 in Articles, Estate Planning - Generally, Trusts | Permalink | TrackBack (0)

Thursday, August 25, 2005

40th Heckerling Institute

The 40th Heckerling Institute on Estate Planning will be held on January 9-13, 2006 at the Fountainblueau Resort and Wyndam Miami Beach Resort in Miami Beach, Florida.

Note that law school faculty members receive a 50% discount on the registration fee.  So, the normal fee of $850 is reduced to only $425!!

As always, the schedule of topics and speakers is awesome!!

August 25, 2005 in Conferences & CLE | Permalink | TrackBack (0)

Trusts and Interstate Commerce

Phillip DeCaro, a 2006 J.D. candidate at the Sturm College of Law in Denver, Colorado, has recently published an article entitled The Impact of Trusts and Escrow Funds on Interstate Commerce, 31 Transp. L.J. 249 (2004).

The main focus of Mr. DeCaro's paper is

The commercial, monopolistic history of trusts, the application of the balancing of interests in the Public Trust Doctrine, and the constructive or implied trusts each have a part in the concern that the misuse of trusts and escrows could adversely affect the rights of commercial creditors and secured parties.

August 25, 2005 in Articles, Trusts | Permalink | TrackBack (0)

Wednesday, August 24, 2005

Double-Occupancy Grave

An elderly gentleman passed away in early July 2005 and was buried in a Hondo, Texas cemetery.  Relatives visiting the site about two weeks after the burial noticed some plastic wrap sticking out of the dirt.  When they tugged at it, they were aghast when they discovered that another person had moved into the grave.

But, this person did not go willingly.  Instead, he was a murder victim, wrapped in plastic and duct tape, and placed in the grave by his evil wife and son.

In a fact pattern that sounds more like Hollywood than real life, the wife reported that her husband had packed his bags and moved out at the same time the medical examiner was performing husband's autopsy.

Wills or intestate succession issues are sure to arise later.

See Mary Moreno, Family charged in slaying, MySA.com (July 27, 2005).

August 24, 2005 in Current Events, Death Event Planning | Permalink | TrackBack (0)

Too Much Control Dooms Another FLP

In Estate of Bongard v. Commissioner, 124 TC No. 8 (2005), the court determined that the assets transferred to a family limited partnership were still in the decedent's estate leading to a tax deficiency of millions of dollars.

Here is the summary as prepared by the tax court:

In 1980, D incorporated Empak, Inc. In 1986, D established an irrevocable stock accumulation trust (ISA Trust) and funded it with some of his Empak stock. In the mid-1990s it was determined by Empak’s board of directors and advisers that pooling all of D’s family’s Empak stock in a holding company, WCB Holdings, LLC. (WCB Holdings), would better position Empak for a corporate liquidity event, which was necessary to raise capital and remain competitive. On Dec. 28, 1996, D and ISA Trust capitalized WCB Holdings by transferring to WCB Holdings their respective shares of Empak stock, and in exchange received WCB Holdings class A and class B membership units. Each class of membership units was further divided into governance and financial units, the class A governance units being the only units with voting rights.

On Dec. 29, 1996, D and ISA Trust formed the Bongard Family Limited Partnership (BFLP). To capitalize BFLP, D transferred all of his WCB Holdings class B membership units to BFLP in exchange for a 99-percent limited partnership interest, and ISA Trust transferred a portion of its WCB Holdings class B membership units to BFLP in exchange for a 1-percent general partnership interest. On Dec. 10, 1997, D made a gift of a 7.72-percent partnership interest to his wife. D made no other gifts of his BFLP interest before his death on Nov. 16, 1998.

The IRS issued a notice of deficiency to the estate on Feb. 4, 2003, which, among other things, returned to decedent’s gross estate, under secs. 2035(a) and 2036(a) and (b), I.R.C., all of the Empak shares decedent had transferred to WCB Holdings.

The estate argues that sec. 2036(a), I.R.C., is not applicable to either D’s transfer of Empak shares to WCB Holdings or D’s transfer of his WCB Holdings class B membership units to BFLP because each transfer was a bona fide sale for adequate and full consideration. The estate argues, in the alternative, that even if the bona fide sale exception was not satisfied by each transfer, D did not
retain a sec. 2036(a)(1) or (2), I.R.C., interest in the property he transferred in either transaction.

Held: D’s transfer of his Empak stock to WCB Holdings satisfied the bona fide sale exception because D possessed a legitimate and significant nontax reason for the transfer.

Held, further, D’s transfer of WCB Holdings class B membership units to BFLP did not satisfy the bona fide sale exception.

Held, further, an implied agreement existed whereby D retained a sec. 2036(a), I.R.C., interest in the WCB Holdings class B membership units he transferred to BFLP.

Held, further, WCB Holdings class B membership units allocable to the 7.72-percent partnership interest in BFLP D gave to his wife are included in D’s gross estate under sec. 2035(a), I.R.C.

For commentary on this case, see Helen W. Gunnarsson, New Limits for Family Limited Partnerships, 93 Ill. B. J. 385 (2005).

August 24, 2005 in Estate Tax, New Cases | Permalink | TrackBack (0)

Tuesday, August 23, 2005

Revenue Procedure 2005-24

The IRS issued Revenue Procedure 2005-24 on April 18, 2005.

This revenue procedure is criticized by Conrad Teitell of the Stamford office of Cummings & Lockwood in his article Inter Vivos CRUTs and CRATs--IRS Opens Pandora's Box with Spousal "Right of Election," 31 ACTEC J. 68 (2005), in which he concludes that "[t]his is a Mickey Mouse revenue procedure."

The article:

  • explains how this revenue procedure is a "drastic solution to a non-existent problem,"
  • warns about potential "adverse applications well beyond CRUTs and CRATs,"
  • recommends that the procedure "be withdrawn or modified," and
  • suggests a "[t]hree-prong solution."

August 23, 2005 in Articles, Estate Planning - Generally | Permalink | TrackBack (0)

Two Mothers but No Dad

On Monday, August 22, 2005, the California Supreme Court released a series of cases holding that a child could legally have two mothers and no father.

In the words of the court, "We perceive no reason why both parents of a child cannot be women."

The cases did not involve inheritance rights.  Instead, they dealt with issues such as child support after the break-up of a same-sex couple and whether two woman may be listed as the parents on a birth certificate.

These opinions set the stage for some mind-boggling intestate succession issues in the future.

Here are links to the opinions in these landmark cases:

See generally Adam Liptak, California Ruling Expands Same-Sex Parental Rights, NY Times, Aug. 23, 2005.

August 23, 2005 in New Cases | Permalink | TrackBack (0)

Monday, August 22, 2005

Estate Planning Third Top Legal Issue

A survey conduct a few years ago by Findlaw.com revealed that estate planning concerns, including wills, trusts, and probate, was the third most common reason an individual consulted with a lawyer.  Only real estate and family law concerns caused more trips to an attoney's office.

See One in Five Americans Faced a Legal Issue in the Past Year: Top Legal Issues: Real Estate, Family Law, Estate Planning, Personal Injury, Traffic Violations, Says FindLaw® Survey, FindLaw, Aug. 5, 2002.

August 22, 2005 in Estate Planning - Generally | Permalink | TrackBack (0)

Cannon Blasted Hunter Thompson's Ashes

Earlier entries on this blog have been tracking the progress of the plans to blast Hunter Thompson's ashes out of a huge cannon.

On Saturday, August 20, 2005, the blast occurred.  Follow this link for a picture of his ashes exploding in fireworks.  The song, Spirit in the Sky, played during the show.

People in attendance included Senator John Kerry, Lyle Lovett, Bill Murray, David Amram, Ed Bradley, and George McGovern.

For all the details, see Katharine Q. Seelye, Ashes-to-Fireworks Send-Off for an 'Outlaw' Writer, NY Times, Aug. 22, 2005.

August 22, 2005 in Current Events, Death Event Planning | Permalink | TrackBack (0)

Sunday, August 21, 2005

Request for Suggestions and News About You and Your Accomplishments & Activities

Greetings:

For many of us, tomorrow begins the new academic year.  Personally, my Texas Estate Administration class begins tomorrow (August 22, 2005) morning at 8:00 a.m. followed by Estate Planning at noon.

As you are probably aware, this blog attempts to serve as a central site to locate and explore comprehensive materials to enhance your teaching of courses that address intestate succession, wills, trusts, estate administration, non-probate assets, planning for disability, and other matters pertaining to estate planning.  A wide range of materials are presented including reference, practical, academic, scholarly, pedestrian, historical, current, etc.

I encourage you to make suggestions and recommendations for materials to be included on this blog.  Unless otherwise requested, I will acknowledge your contribution in my blog entry.

Also, have you recently:

  • published a book or article?
  • made an interesting presentation?
  • received a noteworthy appointment?
  • accepted a position at a different school (permanent or visiting)?

If yes, please consider submitting a summary of the book, article, activity, etc. and I will be post it to this blog.  I am sure your colleagues would be interested -- I know I am!!

May the semester begin well for you and your students.

Gerry

August 21, 2005 in About This Blog | Permalink | TrackBack (0)